Guard against market volatility due to US Fed, FM tells Sebi - Times of India

Guard against market volatility due to US Fed, FM tells Sebi – Times of India

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MUMBAI: Finance minister Nirmala Sitharaman on Tuesday asked markets regulator Sebi to be on the guard about probable volatility in the domestic market due to the US Federal Reserve’s decision to hike interest rate in the world’s largest economy. The FM also asked Sebi to initiate the next generation of market reforms to improve ease of doing business, a Sebi release noted.
The FM appreciated the initiatives taken by the regulator and emphasised the need for Sebi to take further steps to reduce compliance burden, lower the cost of market intermediation, and strengthen investorprotection initiatives. She further asked Sebi to move ahead to develop the corporate bond market and develop the green bond one in the context of increasing focus on ESG (environmental, social & governance) investments.
The FM was meeting the board of the regulator for the first time after presenting her Budget on February 1. It is customary for the FM to address the boards of Sebi and the RBI after the annual Budget.
The FM’s remark about possible market turbulence came against the backdrop of the US Fed’s announcement earlier this month that it would raise rates in March and would also likely move to reduce its bloated balance sheet. This could bring to an end the easy money regime in the US and the Fed’s decision is expected to impact fund flows into emerging markets, including India.
During the meeting with the FM, Sebi chairman Ajay Tyagi briefed the minister about the major trends and outlook for the Indian securities market, including fund-raising activities and increased participation of individual investors, the release said.



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