The Reserve Bank of India (RBI), in its monthly bulletin released late on Friday, stated that the Indian economy had stayed resilient despite global uncertainties rising from the West Asia crisis.
“The escalation of conflict in West Asia in September has led to a sharp increase in crude oil prices, reigniting concerns of a further disruption in global supply chains and build-up of inflationary pressures,” the RBI stated.
Pressure on finances Pressure on finances “Alongside, the rise in sovereign yields in some of the major advanced economies has put pressure on government finances.
Despite such a challenging global environment, the Indian economy recorded a strong GDP growth in Q1:2026-27,” it said.
“High-frequency indicators through August reflected sustained demand with segments of industry and services sectors displaying resilience,” the RBI added in the bulletin.
The central bank further flagged inflationary tendencies in the economy transmitting as crude prices have begun increasing again.
“Headline CPI inflation picked up in August 2026.
Core inflation excluding precious metals has also increased from ultra-low levels of recent months,” the RBI said.
Commenting on the foreign exchange reserves, the regulator said that the special deposit scheme for non-resident Indians (NRIs) led to a record high reserve position of $766 billion as of September 18, 2026.
“The reserves provided cover for 11.2 months of goods imports [as on September 18] and more than 100% of the external debt outstanding as at end March 2026,” the RBI stated in the bulletin.
FCNR B flows also led to an increase in system liquidity, which has resulted in quickening deposit growth potentially supporting the ongoing credit growth cycle.
On the external front, the RBI said that India’s financial and external sectors drew strength from the real economy, despite geopolitical tensions and weather-related uncertainties are acting as key downside risks.
