Bangalore: Since India is one among the fastest emerging market in the world, the country would face funding problems as rupee fall has strengthened the value of dollar, reports Sachin Mampatta of Business Standard.
According to a report from Asia/Global Emerging Markets Strategy, countries like Indonesia, Brazil, turkey and South Africa are the other few countries that will be affected.
The report also mentioned that the funding from other countries would remain crucial for Asian countries and emerging markets will be affected due to the strengthening dollar.
Jonathan F Garner, Pankaj Mataney, Yang Bai and Laura Wang are the people who have authored the report explained that “We are seeing this play out in a pattern of currency weakness, rising domestic rates, banking sector pressures and equity multiple contraction in parts of EM. The risk is of a more general contagion impacting the whole asset class, as occurred in 1997/98 or 2008.”
They further cited, “From an equities perspective, we would also note that two of the more vulnerable countries – Brazil and India – continued as of end of July to be over-weighted....This represents a source of likely continued downward pressure on these currencies in particular.”
“From an equities perspective, we would also note that two of the more vulnerable countries – Brazil and India – continued as of end of July to be over-weighted....This represents a source of likely continued downward pressure on these currencies in particular,” stated the report.
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