FSDC sub-committee meets to discuss major developments in global, domestic economy

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The sub-committee of the Financial Stability and Development Council (FSDC) met on November 15 to review the major developments in the global and domestic economy as well as in various segments of the financial system, the Reserve Bank of India said.

FSDC is the apex body of sectoral regulators, headed by Finance Minister Nirmala Sitharaman.

At the meeting, the members resolved to remain vigilant and proactive to ensure that financial markets and financial institutions remained resilient amidst the spillovers arising from evolving global macroeconomic situation, the RBI said in a press release. Today's meeting took place at the RBI headquarters in Mumbai.

The sub-committee also reviewed the activities of various technical groups under its purview and the functioning of State Level Coordination Committees (SLCCs) in various states and Union Territories, the central bank said. The committee also discussed certain inter-regulatory issues, the central bank added.

The focus of both the government and RBI is to tame inflation, which has remained above the RBI's target. Retail inflation measured by the Consumer Price Index declined to 6.77 percent in October, the lowest in three months, but the 10th straight month of inflation staying above the central bank's upper tolerance band of 6 percent.

On November 3, the Monetary Policy Committee met to deliberate the RBI’s response to the government after failing to meet the inflation mandate. While inflation was already elevated prior to Russia’s invasion of Ukraine in late February, the resultant supply disruptions – especially with regard to cereals and energy-related commodities have added to inflation pressures.

Besides, the fall of the rupee below 80 per dollar is adding pressure to inflation. RBI Governor Shaktikanta Das, in his monetary policy address on September 30 had said that “we are in the midst of a third major shock – a storm – arising from aggressive monetary policy actions” and even more aggressive communication from advanced economy central banks. In a highly integrated global financial system, they inevitably cause negative externalities through global spillovers, Das had said.

Today’s meeting was chaired by Das and was attended by Economic Affairs Ajay Seth, Financial Services Secretary Vivek Joshi, Chief Economic Adviser V. Anantha Nageswaran, Securities and Exchange Board of India (SEBI) Chairperson Madhabi Puri Buch, Insurance Regulatory and Development Authority of India Chairman Debasish Panda, among others.

RBI Deputy Governors Mahesh Kumar Jain, Michael Debabrata Patra, T. Rabi Sankar and Executive Directors O.P. Mall and Saurav Sinha also attended the meeting.