As the MPC has noted time and again, its approach is to look through the first-round effects of exogenous shocks but at the same time to exercise vigilance on the possible emergence of second-round effects which could require a policy response. In this regard, while oil prices have now risen from their low levels, various supplyside factors are expected to constrain these prices.
While NBFCs with better governance standards and better operating practices did well, others bore the brunt of the market forces. Smaller NBFCs and Microfinance Institutions (MFIs), who were contributing significantly to the last mile credit delivery, also got impacted as their funding sources got further squeezed.