New Delhi: Reserve Bank of India (RBI) has said that in 2022-23 the domestic financial market movements remained orderly, notwithstanding persisting impact of global spillovers during the year.
“Relentless strengthening of the US dollar and aggressive tightening of monetary policy by the US Fed impacted portfolio flows, as in other emerging markets economies (EMEs),” the central bank said in its annual report for 2022-23, released on Tuesday.
It further said that the Indian equity market exhibited signs of decoupling on sustained support from domestic institutional investors, adding that the rupee exhibited orderly adjustment with lower volatility relative to many other EMEs.
“The money market trends moved in alignment with the tightening of policy rate cumulatively by 250 bps and the change in policy stance towards withdrawal of accommodation,” it said.
Going forward, financial markets will be conditioned by domestic macroeconomic outlook as also the future path of US monetary policy and the strength of the US dollar, the RBI concluded.