Political uncertainties associated with electoral cycle impacting capital markets: RBI

Posted By: Religare
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Political uncertainties impacting capital markets: RBI
Reserve Bank of India (RBI) has said that political developments on account of the forthcoming elections, in addition to other domestic and global factors, are impacting the capital markets, reported PTI.

In its Macroeconomic and Monetary Developments Second Quarter Review 2013-14, RBi said, "Markets in India also face domestic uncertainties stemming from protracted slowdown, falling corporate earnings and rising leverage, besides risks of political uncertainties associated with the electoral cycle."

The RBI said that the decision of the US Fed to wait for more convincing evidence prior to initiating a graduated withdrawal of its bond buying programme "has provided markets with much-needed breathing space."

"However, market uncertainties remain associated with how the debt ceiling issues will play out over the next several months and whether the incipient signs of recovery in the euro area sustain," the central bank said in the report, released on the eve of the Second Quarter Review of Monetary Policy.

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