"Will we be immune to volatility, the answer is no. Everyone is affected by volatility (but) we are in a much better position (today). But after the first wave of volatility when market participants stop to think, I am hopeful that we will look much better than perhaps competitive countries," Rajan told reporters during the customary post policy interaction here.
Late last month the ECB had announced a fresh USD 1.1 billion bond buying programme even as it kept its interest rates at near zero levels. Similarly, the Swiss central had for the first time lifted the 4 percent cap on franc against the euro, and the Japanese central bank is pumping trillions of yens into the market.
In its sixth bi-monthly monetary policy review, RBI said, "Financial markets remain vulnerable to uncertainty surrounding monetary policy normalisation in advanced economies and a possibly weaker growth in China and oil exporting emerging market economies."
Rajan said the country has made important strides in a few macroeconomic variables like growth, current account deficit, inflation and fiscal deficit.
"Our growth has not plunged as low as some of our comparative countries; the current account deficit has improved, inflation has come down, which is one of the reasons for the stability of the rupee," the Governor added.