The Finance Ministry today said that both the government and the Reserve Bank of India would continue to remain vigilant over the US Fed tapering. The US Federal Reserve yesterday decided to cut its bond purchase by another 10 billion dollars.

It will now purchase 65 billion dollars per month of mortgage-backed securities and longer-term treasury securities as against 75 billion dollars.

Finance Ministry in a statement issued in New Delhi, said, government and the RBI will take steps, which are necessary to ensure stability in the financial markets. It said the decision was expected and should no in any way surprise or affects the country's markets.

However, the statement noted that 65 billion dollars is not a small sum and will continue to infuse a large amount of liquidity into the world markets.

It further said, India's economy is better prepared for the consequences of the taper, if any and it has already added to its foreign exchange reserves, which stands at 295 billion dollars.