RBI: Even as monetary policy remains accommodative, global spillovers led to tightening of financial conditions

17 Feb 2022 , 04:34 PM

In the bulletin for February 2022, RBI has stated that despite monetary policy remains accommodative, global spillovers have led to the tightening of financial conditions. RBI in the bulletin highlighted the state of the economy, creative destructions, bad banks and Covid-19 impact on manufacturers.

In the State of Economy chapter, RBI said “domestic macroeconomic conditions are striking a path that is diverging from global developments. In India, the recovery in economic activity is gaining strength and traction as it emerges from the third wave.”

As per RBI, both manufacturing and services remain in expansion with optimism on demand parameters and an uptick in consumer and business confidence.

RBI says, “as businesses return to a new normal, the job landscape is expected to improve. Farm sector conditions remain robust albeit with some signs of rural demand slackening.”

“Even as monetary policy remains accommodative, global spillovers have led to a tightening of financial conditions,” RBI added.