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Government better prepared to deal with US Fed tapering: FM

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Capital Market
Last Updated : Dec 19 2013 | 11:55 PM IST

US Federal Reserve has announced to cut securities purchase to USD 75 billion per month from USD 85 billion

The Finance Minister has commented that the Government has taken note of the statement issued by the US Federal Reserve on the 'taper', while claiming that the Government is better prepared than in May 2013 to deal with the consequences, if any, of the US Federal Reserve's decisions. As per the finance minister, the markets had already factored in the US Federal Reserve's decisions and, therefore is not likely to be surprised by these moderate changes.

The US Federal Reserve has announced that it will continue to purchase securities at the rate of USD 75 billion per month, as against the earlier level of USD 85 billion per month. US Federal Reserve will continue its purchases of Treasury and agency mortgage-backed securities, and employ its other policy tools as appropriate, until the outlook for the labor market has improved substantially in a context of price stability.

US Federal Reserve expects that the current exceptionally low target range for the federal funds rate of zero to 0.25% will be appropriate at least as long as the unemployment rate remains above 6.5%.

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First Published: Dec 19 2013 | 2:25 PM IST

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