Current geopolitical conditions may open new market opportunities for India: RBI

India's external sector has remained resilient despite the ongoing global challenges: Reserve Bank of India (RBI) Governor

May 5, 2022

Exports remained strong in April ‘22 and services exports reached a new high in March ‘22

India’s external debt to GDP ratio remains low at 20%

The banking system's average surplus liquidity was INR 7.5 trillion

RBI will provide sufficient liquidity in the economy to meet the country’s productive needs, while also promoting further growth in disbursing credit: RBI Governor

The recent trade agreements and geopolitical conditions will open up potential market opportunities for India, according to the RBI governor Shaktikanta Das. 

By referring to provisional data which showed that merchandise exports remained strong in April ‘22 and services exports reached a new high in March ‘22, he mentioned that India’s external sector has remained resilient despite the ongoing global challenges.

He also said that India’s foreign exchange reserves are sizeable with the total number of Forward Assets providing a strong backup, and the external debt to GDP ratio remains low at 20%.( The high commodity prices could impact the current account deficit in 2022-23 but the RBI expects it to be comfortably financed.

In terms of liquidity, the governor has stated that the RBI will provide sufficient liquidity in the economy to meet the country’s productive needs, while also promoting further growth in disbursing credit.

From April 8 to 29, 2022, the banking system’s average surplus liquidity, as measured by total absorption through Standing Deposit Facility (SDF) and Variable Rate Reverse Repo (VRRR) auctions, was INR 7.5 trillion.

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