Mumbai: The Reserve Bank on Monday said that disruptive movements from the Eurozone, coupled with a possible rise in commodity prices, pose risk to the domestic financial market. "Going forward, there are risks of disruptive movements from the euro area and financialisation of commodities (to the domestic financial market)," the RBI said on the eve of annual monetary policy. The central bank in its Macroeconomic and Monetary Development report also said the rise in crude oil prices will be a new risk factor to global and domestic financial market. "While as a base line, global oil prices in 2012-13 could average around current levels, the upside risks are greater than the downside risks...If these upside risks materialise, the negative spillovers on the domestic markets can be large given their impact on inflation and lag on growth, as also its fiscal and external sector positions," the report said. It also observed that the monetary policy in advanced economies had enhanced capital flows into the country. Referring to yield on government securities, the central bank noted that higher government borrowing has hardened bond yield. It also said the rupee remained volatile due to higher current account deficit and global uncertainty in recent times.

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