The measures taken, in particular the announcement of outright monetary transactions, are conducive to the national and European reforms which alone can eradicate redenomination risk. Monetary policy can guarantee stability only if the area’s economic fundamentals and institutional architecture are consistent with that objective. Every country must do its part.
Another factor that has repercussions for India’s external sector is the recent developments around Brexit. There are consequential policy challenges for India which enjoys strong trade and investment relations with UK and the EU. We will carefully weigh the challenges and opportunities that lie ahead and undertake appropriate policy responses. 16.