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Informist, Tuesday, May 5, 2026

 

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--Moody's: India most resilient to recent shocks across mkt indicators 
--Moody's: India well placed to manage future shocks 
--Moody's: India to manage future shocks on clear monetary policy frameworks 
--Moody's: India's inflation expectations are well anchored 
--Moody's:India's low reliance on external debt curbs exposure to global risk 

 

MUMBAI – India was the most resilient large emerging market to recent global shocks, Moody's Ratings said in a report Tuesday. India is also well-placed to manage future shocks given its clear and predictable monetary policy framework and adjustable exchange rates, the report said. Inflation expectations remain well anchored, and exchange rates can adjust when needed, the rating agency said.

 

India showed the strongest market resilience in local yield volatility, exchange rate depreciation and spread volatility, among other nine emerging market economies. Moreover, comfortable foreign-exchange reserves helped ease foreign-exchange volatility and reinforced confidence in India during global shocks. Volatility in local currency yields rose during stress but remained below its peers, primarily due to predictable rate and foreign-exchange repricing rather than sustained credit stress. 

 

On the debt front, India has extended maturities, which helped to limit rollover risks amid global shocks. Additionally, low reliance on external issuances reduced sensitivity to global risk sentiments. However, fewer external issues lead to concentration of domestic risk and higher yields.             

 

Structurally, India's reliance on domestic funding was balanced by the deep markets and ample reserves. However, a relatively high debt burden and weak fiscal balance limit the ability to respond to successive shocks. 

 

Last month, Moody's Ratings had lowered its forecast for India's GDP growth in 2026-27 (Apr-Mar) by 80 basis points to 6.0% due to the ongoing war in West Asia, which was seen hitting private consumption and industrial activity.  End

 

Reported by Janwee Prajapati

Edited by Tanima Banerjee

 

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