RBI Bulletin - July 2022 - আরবিআই - Reserve Bank of India
RBI Bulletin - July 2022
The Reserve Bank of India today released the July 2022 issue of its monthly Bulletin. The Bulletin includes eight Speeches, six Articles and Current Statistics. The six articles are: I. State of the Economy; II. Monetary Policy: Confronting Supply-driven inflation; III. Remote Sensing Applications for Policy: An Assessment of Agricultural Commodity Arrivals; IV. Fed Taper and Indian Financial Markets: This Time is Different; V. Headwinds of COVID-19 and India's Inward Remittances; and VI. Electronification of FX Markets in India. I. State of the Economy In a global landscape marred by fears of recession and war, the Indian economy shows resilience. The recent revival of the monsoon, the pick-up in manufacturing and services, stabilisation of inflation pressures and strong buffers in the form of adequate international reserves, sufficient foodgrain stocks and a well-capitalised financial system together brighten the outlook and strengthen the conditions for a sustainable high growth trajectory in the medium-term. II. Monetary Policy: Confronting Supply-driven Inflation The role of monetary policy in response to supply-driven inflation has attracted a lot of attention in the wake of current global inflationary episode. This article using simulations from the Quarterly Projection Model to an adverse supply shock characterized by an increase in crude oil price shows that monetary policy response is conditioned by a) the nature of the shock; b) aggregate demand conditions; c) monetary policy credibility; and d) the reaction of other agents in the economy to the shock. Highlights:
III. Remote Sensing Applications for Policy: An Assessment of Agricultural Commodity Arrivals The role of supply side factors in shaping the trajectory of food inflation and inflation in general has been well-recognised. Timely and reliable indicators of crop production are key to assessing inflationary trends in the near future. In this context, the study explores the utility of satellite imagery-based vegetation indicators for assessment of commodity arrivals in agricultural mandis, well in advance. Highlights:
IV. Fed Taper and Indian Financial Markets: This Time is Different Taper of large scale asset purchase programmes initiated by the Fed in response to the adverse economic consequences associated with macroeconomic shocks has the potential to significantly impact the financial market variables in emerging market economies. This article compares the impact of the Fed’s two taper announcements (May 22, 2013 and November 3, 2021) on Indian financial markets. Highlights:
V. Headwinds of COVID-19 and India's Inward Remittances India’s inward remittances have proven to be a resilient source of current account receipts during the COVID-19 pandemic. This article identifies the factors determining the resilience of remittance inflows across countries and highlights the changes in the geographical and socio-economic composition of remittances, driven by the home and host country crisis dynamics and the severity of the impact across different working class. Highlights:
VI. Electronification of FX Markets in India The electronification of global foreign exchange (FX) trading with the emergence of multi-bank platforms has transformed the execution of trade and price discovery. Some of these changes can be seen even in the onshore Indian Rupee (INR) market, albeit in a limited way. This article documents the recent changes in FX markets in India in terms of electronification and its broader implications. Highlights:
(Yogesh Dayal) Press Release: 2022-2023/546 |