RBI follows Fed's example, steps in to calm financial markets

The Reserve Bank of India in a statement on Tuesday said that it is ready to take "appropriate actions" to ensure the orderly functioning of financial markets. The central bank's statement came after fresh cases of coronavirus infection were detected in India.

The RBI statement comes after a similar one by the US Federal Reserve in the backdrop of the coronavirus outbreak.

In a statement the apex bank said : "The Reserve Bank of India is monitoring global and domestic developments closely and continuously and stands ready to take appropriate actions to ensure the orderly functioning of financial markets, maintain market confidence and preserve financial stability."

Globally, financial markets have been experiencing considerable volatility, with the spread of the coronavirus triggering risk-off sentiments and flights to safe haven. Spillovers to financial markets in India have largely been contained, RBI said.

Sentiments across global markets improved over Federal Reserve's statement last week that the central bank would use its tools and "act as appropriate to support the economy".