India Likely To Withstand Capital Volatility: Moody's

Posted By: Religare
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Rating agency Moody's has said that the uncertainty over transition of the US monetary policy to normalcy could set off volatility in capital flows to emerging economies.

India Likely To Withstand Capital Volatility: Moody's
Commenting on the issue, Moody's Investors Service VP and Senior Research Analyst Rahul Ghosh told the media, "Besides the Fed rate action, a slowdown in the Chinese economy and falling commodity prices are other major global developments that could impact emerging markets."

"India appears less exposed than other similarly-rated emerging market sovereigns, given its small current account deficit and relatively low external debt as a share of nominal GDP," he added.

The rating agency further added that the countries with limited buffers and policy space would remain most at risk to adverse capital flows and investor sentiment. The most affected large emerging markets are expected to be Brazil, Russia, Turkey and South Africa.

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