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Chidambaram said that India is prepared for the US measure to reduce monetary stimulus that has supported inflows of cash to emerging markets.
“The Government is of the view that markets had already factored US Federal Reserve’s decisions; thus not likely to be surprised by moderate changes,” said Chidambaram.
Chidambaram also spoke to the Governor of the Indian central Bank Raghuram Rajan on Thursday regarding the Federal tapering.
“We are better prepared than in May 2013 to deal with consequences, if any, of US Federal Reserve decisions,” said Chidambaram.
The Indian Finance Minister was echoing Brazilian President Dilma Rousseff who reacted soon after the Fed announcement saying the Brazilian economy is resilient.
“Brazil has never been so ready,” she said in a statement on national radio.
The US Federal Reserve on Wednesday decided to scale back its quantitative easing program by $10 billion.
“In light of the cumulative progress toward maximum employment and the improvement in the outlook for labour market conditions, the Committee decided to modestly reduce the pace of its asset purchases,” the Fed’s policy-making Open Market Committee (FOMC) said in a statement.
The Indian rupee had lost as much as 20 per cent against the dollar before recovering this summer over fears of the US Fed’s possible tapering.
India’s economic affairs secretary, Arvind Mayaram had expressed confidence to handle any fallout of the tapering saying that India has taken measures to bolster the forex reserves and control the current account deficit.