New Delhi [India], December 29 (ANI): The Indian financial system is confronting sturdy world headwinds however sound macroeconomic fundamentals and wholesome monetary and non-financial sector stability sheets are offering energy and resilience and monetary system stability, stated RBI in its Monetary Stability Report on Thursday.
"For rising market economies (EMEs), the challenges are even harsher as they encounter world spillovers, debt fragility, foreign money volatility, and capital outflows," it stated within the report.
The worldwide financial system too is going through formidable headwinds with recessionary dangers looming giant, it stated.
"The interplay of a number of shocks has resulted in tightening of economic situations and heightened volatility in monetary markets," the report stated.
About inflation, it stated although it's elevated, however is retreating in response to financial coverage actions and supply-side interventions.
The RBI, in its combat towards rising inflation, hiked the important thing coverage fee by 225 foundation factors since Might to six.25 per cent to chill off home retail inflation that had stayed above the RBI's higher tolerance restrict for over three quarters. Elevating rates of interest sometimes cools the demand within the financial system, thereby placing a brake on inflation.
The newest hike was on December 7, when the Financial Coverage Committee (MPC) of the RBI elevated the coverage repo fee by 35 foundation factors. (ANI)
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