said financial markets worldwide are facing intense selling pressures on extreme risk aversion due to the spread of COVID-19 infections, compounded by the slump in international crude prices and a decline in bond yields in advanced economies. "Flight to safety has led to a spike in volatility across all asset classes, with several emerging market currencies experiencing downside pressures. Mismatches in US dollar
liquidity have become accentuated across the world," the RBI
Assuring that the RBI is monitoring the situation, the central bank said, "The RBI stands ready to take all necessary measures to ensure that the effects of the COVID-19 pandemic on the Indian economy are mitigated, and financial markets and institutions in India continue to function normally."
According to the market data, foreign investors have withdrawn more than Rs 21,000 crore this month from Indian capital markets so far amid growing concerns over the virus hitting the global economy. "The level of forex reserves at $487.24 billion as on March 6, 2020, remains comfortable to meet any exigency," the bank noted.