India’s Central Bank Says It’s Ready to Act to Calm Markets

(Bloomberg) --

The Reserve Bank of India said it’s ready to act to counter financial market volatility amid the coronavirus outbreak, reiterating comments from global central bankers in recent days.

While spillovers into domestic financial markets have been relatively contained, the RBI said in a statement Tuesday it “stands ready to take appropriate actions to ensure orderly functioning of financial markets, maintain market confidence and preserve financial stability.”

Central banks in Japan and the U.K. on Monday pledged action to stabilize markets, following on from comments from the U.S. Federal Reserve last week signaling a possible rate cut. Group of Seven finance chiefs will hold a rare conference call Tuesday amid speculation of more policy coordination.

“Growing hopes of coordinated policy action to mitigate a broader fallout to economic activity has boosted market sentiment today,” the RBI said.

India’s benchmark S&P BSE Sensex index was trading 1.5% higher Tuesday, on course for its biggest advance in a month, while the rupee gained as much as 0.4% in early trade before turning lower. Bonds gained early in the session with the yield dropping to 6.34%.

Prime Minister Narendra Modi, who held a review of the nation’s preparedness to handle the spread of the virus, said Tuesday “there is no need to panic.” Five people have tested positive for the virus as of March 2.

©2020 Bloomberg L.P.