Government and RBI closely watching Brexit

The government and Reserve Bank of India (RBI) are closely monitoring the external situation emerging out of Britain’s decision to exit the European Union, to take appropriate policy measures when needed, Finance Minister Arun Jaitley said on Tuesday.

“The government and RBI are closely monitoring the emerging external situation due to exit of Britain from the European Union, to take calibrated appropriate policies as and when required,” Jaitley said in a written reply to a Rajya Sabha question. He said that Brexit is a long-drawn process. “Even with Brexit, the EU rules will continue to apply to the UK, until the Article



50 negotiations are complete. So, the UK would not be able to change its immigration policies or adopt its own trade polices till then,” Jaitley said.

“Accordingly, to Article 50 of the EU treaty, the negotiations can last up to two years, and may be extended if the 27 remaining states agree,” he added.

Jaitley’s assurance came close on the heels of the International Monetary Fund cutting its forecast for the UK’s growth next year, after warning that the decision to leave the EU has damaged the British economy’s short-term prospects and “thrown a spanner in the works” of the global recovery.