Economic Survey: External sector resilient to Fed moves to combat inflation

Survey says salient external sector sustainability indicators are strong and much better than what they were during the global financial crisis or taper episode of 2013

India’s external sector is resilient to face any unwinding of the global liquidity arising out of the likelihood of faster normalisation of monetary policy by systemically important central banks, including the Fed, in response to elevated inflationary pressures, the latest Economic Survey said.

In response to the pandemic, the Fed had been buying $80 billion of treasury securities and $40 billion of agency mortgage-backed securities (MBS) each month since June 2020. In late July 2021, the Fed signalled that it would start reducing the volume of its bond purchases later in the year. On November 3, 2021, the Federal Open