The Reserve Bank of India in its latest monthly bulletin ‘October 2021’ has said that amidst an accentuation of global risks, the Indian economy is picking up steam, although the recovery is uneven and trudging through soft patches. The step up in vaccination, slump in new cases/mortality rates and normalising mobility has rebuilt confidence.
The latest monthly bulletin has also showed that domestic demand is gaining strength while aggregate supply conditions are recouping, powered by the robust performance of kharif agricultural production and revival in manufacturing and services. Softer than expected food prices have eased headline inflation into a closer alignment with the target.
Reserve Bank of India further noted that some alternate ways to enhance returns on forex reserves could be increasing duration of portfolio, investment in new products/asset classes, active management of gold and investment in new markets. The choice of strategy, however, would require to be tailored to suit the risk appetite, investment priorities, skill sets and operational capabilities of individual institutions.
