MANU/RPRL/0125/2019
Ministry : Reserve Bank of India
Department/Board : RBI
Press Release No. : 2018-2019/3066
Date : 27.06.2019
RBI releases June 2019 Financial Stability Report
The Reserve Bank of India today released the 19th issue of the
Financial Stability Report (FSR). The FSR reflects the collective assessment of the Sub-Committee of the Financial Stability and Development Council (FSDC) on risks to financial stability, as also the resilience of the financial system. The Report also discusses issues relating to development and regulation of the financial sector.
Overall assessment of systemic risks
India's financial system remains stable in the backdrop of improving resilience of the banking sector, even though the emerging trends in global economic as also geopolitical environment pose challenges.
Global and domestic macro-financial risks
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Global economic activity continues to face significant headwinds since the second-half of 2018 culminating in a lower global growth forecast of 3.3 per cent in 2019. Adverse geopolitical developments and trade tensions are gradually but predictably taking a toll on business and consumer confidence.
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Advanced economies' (AEs) central banks have eased their monetary policy stance. While asset prices and global capital flows initially recovered in response, the markets appear to be deeply conditioned by the implied 'Fed put' and any significant reassessment would require re-rating of a host of issues relating to emerging market and developing economies (EMDEs) with a risk of sharp adjustments.
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Domestic economy hit a soft patch recently as private consumption, the key driver of GDP, turned weak. This along with subdued new investment pipeline and a widening current account deficit have exerted pressure on the fiscal front.
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Reviving private investment demand remains a key challenge going forward while being vigilant about the spillover from global financial markets.