Mumbai, April 16 -- IMF stated in its latest Global Financial Stability report that global financial stability risks are elevated. The global financial system is confronting the ongoing war in the Middle East, potential inflationary pressures, rising risks of further tightening in financial conditions, and several amplification channels that could lead from market turmoil to financial instability. Since late February, global equity prices have declined while bond yields have risen sharply, driven by a jump in energy prices and market expectations of higher inflation. Emerging market assets have been strongly impacted, especially in commodity-importing and more vulnerable countries.

IMF noted that while markets have functioned in an order...