Global Market Volatility: West Asia Conflict and US Trade Scrutiny Shake Global Markets

The RBI bulletin highlights increased market volatility due to West Asia conflict and US trade actions. Despite this, India's forex reserves remain robust, and GDP estimates reflect economic resilience. High-frequency indicators suggest economic momentum in February, although inflation rose due to food costs. System liquidity remains adequate.

Global markets are witnessing increased volatility, driven by the ongoing conflict in West Asia and new trade investigations by the United States.

The Reserve Bank of India (RBI) bulletin provides insights into these developments, highlighting that despite the turmoil, India's foreign exchange reserves are well-positioned to buffer against external shocks.

In its latest economic bulletin, the RBI details the state of the Indian economy, noting that preliminary GDP estimates for 2025-26 demonstrate continued resilience. Economic indicators suggest growing activity in February, though consumer inflation has ticked upward due to higher food prices. Nonetheless, system liquidity has remained stable, supported by increased financial flows to the commercial sector, sourced from both banks and non-bank entities.

(With inputs from agencies.)