Financial conditions ease in April; external headwinds to weigh: CRISIL

Major central banks likely to increase pace of tightening to combat inflation; US Fed has already raised its policy rate twice until May, and S&P expects five more hikes in 2022

The reading on CRISIL’s Financial Conditions Index (FCI) eased in April relative to previous month as some of the global headwinds set in motion by the Russia-Ukraine war stabilised.

On the domestic front, some tightness in interest rates was seen following the RBI policy in April. Yet, the real policy rate stayed negative (as inflation remains higher than the repo rate), while bank lending rates remained at decadal lows. This, along with improving economic activity, contributed to a recovery in credit growth, CRISIL said in a statement.

CRISIL’s FCI is a monthly tracker based on 15 key parameters