Amid fears of a spurt in international commodity prices expressed by experts due to European Central Bank's plan to sovereign bonds, a Finance Ministry official today said the move is not going to have "much impact" on India in the immediate run.
"There is not going to be much impact as of now. But we have to see how we are able to handle our own problems," Economic Affairs Secretary Arvind Mayaram told reporters on sidelines of a FICCI event.
The ECB yesterday announced a programme that allows it to execute potentially unlimited sovereign bond-buying, a bid to save the region's currency.
Meanwhile, PHDCCI President Sandip Somany said the massive bond buying programme announced by the ECB could trigger a rise in international commodity prices and stoke inflation in supply constrained economies like India.
He said the prices of key commodities such as crude oil, food articles and gold may enter higher trajectories in international market and stoke inflation in the domestic economy due to the move.
Meanwhile, the Sensex today spurted by over 337 points, its biggest single day gain in two months, on buying across-the-board following European Central Bank's decision.
Yesterday, Reserve Bank deputy governor K C Chakrabarty had said in Mumbai that the ECB's latest move could boost capital flows as well as bring down current account deficit but may also increase commodity prices on the flipside.
"Yes, the bond-buying programme announced by ECB could increase the fund flows into our economy. If it happens, which is likely, then it can help bring down our high current account deficit. From that point, the move is good for us but it also can increase commodity prices," Chakrabarty had said.
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