According to media reports, an official from the Reserve Bank of India (RBI) has assured that India is strongly placed to handle the temporary effect of Brexit that stunned global financial markets, sending stocks, currencies and commodities in a tailspin.
With a forex reserves kitty of over USD 360 billion, a record high, and import cover of more than a year and shrinking current account deficit, Asia's third biggest economy has plenty of ammunition to deal with possible volatility in capital flows amid increased risk aversion due to uncertainty post the Brexit verdict.
"India's forex reserves of more than USD 360 billion and import cover of more than a year would be adequate in managing the temporary effects of the recent Brexit, if at all there is an impact," RBI Regional Director, Thiruvananthapuram, S M N Swamy, said, the PTI reported.
While Indian financial markets succumbed to a massive sell-off on Friday as Brexit unnerved traders across the globe, the gloom and doom is unlikely to persist given India's strong macro-economic fundamentals that will enable the country to maintain its strong position as a leading foreign investment destination.
The 30-share Sensex on Friday staged a handsome recovery to end down 604.51 points lower at 26,397.71 after plunging as much as 1,091 points earlier as Brexit triggered a knee-jerk reaction.