Within minutes of Brexit, Indian stock markets lost nearly four lakh crore rupees from its investor’s wealth.
To guard against the volatility, RBI infused liquidity in the forex market and brought some domestic institutions at lower levels.
Traders from a global brokerage
The India-Britain trade, which was worth $14.02 billion in 2015-16, might take a hit if the British economy slows down.
Britain has been crucial to India with 800 Indian companies like Bharti Airtel, Tata Motors, HCL Technologies, Apollo Tyres etc. doing business in that country. The result will affect companies’ earnings and might lead to a few pullouts. Also, a fifth of India’s foreign exchange reserves come from export earnings and other inflows from the European Union and the UK.
Prime Minister Narendra Modi with David Cameron
However, RBI governor Raghuram Ranjan said that the panic over Brexit was a bit exaggerated and it would not impact the rupee that much.
He told ET
, “Overtime the domestic currency has depreciated in consonance with interest differential over the world. The rupee movement today is moderate compared with other markets.” In follow up to Brexit, the pound plunged to 31-year low while the rupee was down almost 96 paise.
After the EU referendum, Prime Minister David Cameron announced his resignation