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The Reserve Bank of India (RBI) in its latest monthly bulletin ‘July 2022’ has showed that in a global landscape marred by fears of recession and war, the Indian economy shows resilience. The recent revival of the monsoon, the pick-up in manufacturing and services, stabilisation of inflation pressures and strong buffers in the form of adequate international reserves, sufficient foodgrain stocks and a well-capitalised financial system together brighten the outlook and strengthen the conditions for a sustainable high growth trajectory in the medium-term.

The article published in the RBI's monthly bulletin compared the impact of the two taper announcements (May 22, 2013, and November 3, 2021) by the US Federal Reserve (Fed) on Indian financial markets. The event study results indicate that the 2021 Taper (Taper 2) announcement was less severe as compared to Taper Tantrum of 2013 (Taper 1) in terms of its impact on Indian bond yields and spreads.

Besides, the monthly bulletin noted that the electronification of global foreign exchange (FX) trading with the emergence of multi-bank platforms has transformed the execution of trade and price discovery. Some of these changes can be seen even in the onshore Indian Rupee (INR) market, albeit in a limited way.