The stress in our domestic markets may prevail for sometime as the Reserve Bank of India (RBI) raised concerns that the global environment has turned hostile and our main markets are not recovering.
“The global market environment has turned hostile and our main markets are not recovering as fast as it was initially thought, so, exports are suffering,” said Subir Gokarn, deputy governor, RBI, at an event on Monday.
According to Gokarn, the crisis of the past never actually ended and we are still in it. “During the crisis there was a rapid exit of capital, and this had put pressure on liquidity, domestic financial markets and the currency,” said Gokarn.
According to Gokarn, the global environment is going to be much less hospitable for India. Besides, even commodity prices are stubborn.
Inflation is high and oil and food prices are adding pressure to it, Gokarn said.
Wholesale price inflation fell to an eight-month low of 7.45 per cent in October, after showing signs of a surge in September when it touched 7.81 per cent from the 7.55 per cent estimated provisionally in August.