Finance Ministry says it's business as usual after US Fed's decision

NEW DELHI: The finance ministry on Thursday played down US Fed’s decision to continue with its bond purchase programme, which boosted the rupee and sent the stock market indices to 34-month high.

“We should not overly put emphasis on the decisions of the Fed in the manner in which the economy will unfold... It is business as usual for us, as far as we are concerned,” said Department of Economic Affairs (DEA) secretary Arvind Mayaram.

He, however, added that it would have been good if there was some kind of policy guidance (from the Fed) so that there was certainty as to how the taper will happen.

On Wednesday, the Fed announced that it would postpone any retreat from its monetary stimulus campaign and also refused to fix a time period for the same.

Fed chairman Ben Bernanke on Wednesday said that there is no fixed calendar schedule for tapering of its monetary stimulus campaign. “If the data confirm the basic outlook, if we gain more confidence in that outlook... then we could move later this year,” he had said.

The BSE Sensex gained 3.43% or 684 points to close at 20,646.64, highest since November 2010. The Indian rupee also rallied to its onemonth high and closed at 61.77 against the dollar

Financial services secretary Rajiv Takru said that the domestic currency “has to follow the market diktats...I think it is still a little undervalued”.

Takru said that markets have given sufficient indication about how they have perceived the Fed’s decision to delay the tapering of the bond-buying programme. “We have to plan in our interests. And we were ready for any kind of a decision which was taken. So we are happy, I think we were ready for both,” he added.