Brexit: Bank of England ready with £250 bn to calm markets

London, June 24 (IANS) Making the first moves to calm the markets following Britain’s vote to leave the European Union (EU), Bank of England Governor Mark Carney on Friday announced that it was ready to provide additional liquidity worth £250 billion and take any other steps needed to ensure market functioning.

“The Bank of England is well prepared for Brexit. It is ready to provide additional funding of 250 billion sterling. It is also ready to meet additional substantial liquidity needs, if required,” Carney said at a press conference here.

“In a couple of weeks, the Bank will meet again and consider additional responsibilities,” he said.

“The Bank of England has put in place a system to ensure that the core of the financial system is capitalised, resilient and has sufficient liquidity,” he added.

He said Britain’s central bank will ensure enough liquidity in the system so that its financial services continue to support the functioning of the economy.

“That economy will adjust, with new trading relationships,” Carney said.

“The best contribution of the Bank of England is in carrying out its processes for monitoring financial stability. It will not hesitate to take any additional steps in this direction,” he added.

The British pound — that had rallied to nearly $1.5 in early trades — fell sharply to its lowest level since 1985 at $1.35.

The Bank of England has been of the view that leaving the EU will damage growth and risk pushing the country into recession.

Meanwhile, reacting to the British referendum result from Basel in Switzerland, Reserve Bank of Indian Governor Raghuram Rajan said the verdict would have implications for the UK economy.

“The referendum result also shows the nature of political forces that are gathering together vis-a-vis-trade,” Rajan told a TV news channel.

–IANS

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