Mumbai: India has been the most resilient large emerging market economy since 2020, with sizeable foreign exchange reserves helping check currency volatility during global shocks, Moody’s Ratings said Tuesday.
In a report on emerging markets, Moody’s said India is well placed to manage future shocks because its monetary policy framework is clear and predictable, inflation expectations are well anchored, and the exchange rate can adjust when needed.
“India’s forex reserves have reinforced confidence during global shocks,” the agency noted. The reserves act as a buffer, giving policymakers room to respond to external pressures without sharp disruptions to growth.
The report pointed to India’s ability to weather the pandemic, commodity price swings, and global rate hikes since 2020. Unlike several peers, India avoided a sovereign downgrade and maintained macro stability through the period.
Moody’s added that credible inflation targeting by the Reserve Bank of India and a flexible rupee have helped absorb external stress. That combination, it said, leaves India better positioned than many large emerging markets to handle future volatility.
The assessment comes as global investors weigh risks from trade shifts, geopolitical tensions, and uneven growth. India’s forex reserves stood above $650 billion as of late April, according to RBI data.
