New Delhi: India with a "fortress balance-sheet" and strong GDP growth is "very well-equipped" to deal with any volatility that may arise from a gradual interest rate hike by the US Federal Reserve, Minister of State for Finance Jayant Sinha said on Thursday.
"We have to consider how the Fed is going to raise its rates, going forward... We are very well-equipped to deal with any turmoil or volatility that may ensue as the Fed raises rates," Sinha told reporters here.
The US Federal Reserve had last night hiked interest rates by 0.25 per cent for the first time in about a decade, signalling that the US economy is strengthening.
The US central bank has said it is likely to proceed gradually in normalising the interest rates, although future policy actions will depend on how the economy evolves relative to its objectives of maximum employment and a two per cent inflation.
"India is very well-prepared. We have a fortress balancesheet, sound fiscal management, and strong GDP growth. And therefore, we continue to be a bright spot in the global economy," Sinha added.
He said the Ministry of Finance is monitoring the currency markets on a "consistent basis because those tend to move most rapidly and in the most volatile manner when it comes to interest rate changes".
Sinha maintained that the US Fed action is on the excepted lines. "They were widely priced into all the markets and which is why, markets have rallied of course around the world," he said, adding that the Fed has indicated a dovish gradualist approach to raising rates in the next 12 months.
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