• Crisil Intelligence
  • Economy
  • FCI
  • Financial Conditions
  • Financial Conditions Index
  • First Cuts
  • Foreign portfolio investors
  • FPI
  • Macroeconomics
  • West Asia Conflict
May 14, 2026 Content Type Report

Crisil Economy First Cut: Financial conditions continue to be tight

May 14, 2026 Content Type Report

Macroeconomics | First cut

Download Icon
Download report
  • Financial conditions remained under pressure in April, with the Crisil Financial Conditions Index (FCI) standing at -1.2, a slight improvement from March’s -1.4. A negative FCI value, particularly one that falls outside the comfort band of one standard deviation, indicates financial conditions are significantly tighter than the long-period average (measured since April 2010), while a higher FCI value indicates easier conditions compared with the previous month
  • The West Asia crisis continued to adversely impact foreign portfolio investor (FPI) inflows, the rupee and the 10-year government security (G-sec) yield in April
    • FPIs continued withdrawing from Indian markets, resulting in net outflows of $7.6 billion in April, driven by surging crude prices and apprehension stemming from the conflict. In addition, hardening US yields further dampened FPI sentiment for debt
    • The rupee continued to depreciate, reaching an all-time low of 95 per dollar at the end of April
    • Fiscal concerns arising from the conflict led to a sharp rise in the 10-year G-sec yield, which rose ~20 basis points (bps) on-month to an average of 6.96%. The yield also faced pressure from rising FPI outflows in debt and surging crude oil prices
  • Financial conditions are likely to remain tight in the coming months, as the West Asia conflict poses considerable pressure on the economy. Even if the West Asia conflict ends there will be lingering effects and crude oil prices are expected to remain high for rest of the year. We expect crude oil to average $90-95/US dollar in the current fiscal year. The overall impact on financial conditions can amplify with the rise in scale, duration and intensity of external shock
Download report
crisil-loader