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Contingency plan ready for volatility on poll results: Raghuram Rajan

Thursday, 15 May 2014 - 6:01pm IST | Place: Shimla | Agency: PTI

The Reserve Bank today said it has put in place contingency plans to infuse liquidity into the system to deal with any possible volatility in markets tomorrow in view of the election results.

"We assured the board that we are in discussions with the Finance Ministry and Sebi and we have placed prudential contingency plans to infuse liquidity if needed. We hope that everything will go normally tomorrow when the election results are announced," RBI Governor Raghuram Rajan said. He was speaking to reporters after a meeting of central board of the RBI.

The BSE benchmark Sensex has rallied over 1500 points in the last five trading sessions while the Rupee closed at nearly 10-month high of 59.29 against the US dollar today. Both the stock and forex markets are expected to remain volatile in view of the announcement of results for the general elections. Finance Minister P Chidambaram earlier this week asked the regulators to maintain a strict vigil on the volatility in stock markets on the day of poll results.

While market authorities have been already monitoring stock movements very closely since last few days, which saw markets surging to record highs on the back of exit poll and other predictions, they are now mainly focusing on tackling any possible shocks tomorrow and on Monday. The counting of votes for 543 Lok Sabha constituencies will begin tomorrow at 8 am, while clear trends are likely to emerge by afternoon and final results may keep coming out till late evening.

Exit polls show BJP-led NDA is set to form the government after votes are counted tomorrow. The markets would open as per their normal time at 9 am and close at 3.30 pm, leaving scope for impact of the results on Monday as well after weekly trading holidays on Saturday and Sunday. 




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