New Delhi: Global rating agency Moody’s Ratings on Tuesday said that India has been the most resilient large emerging market economy since 2020, and its sizeable forex reserves have helped check currency volatility and reinforce confidence during global shocks,
In a report on emerging markets, Moody’s said that India is well placed to manage future shocks because monetary policy frameworks are clear and predictable, inflation expectations are well anchored, and exchange rates can adjust when needed. “India is better placed among emerging market sovereigns to manage future global shocks,” Moody’s said, adding that the country would also enter any future periods of stress with strong and accessible buffers.
“India’s reliance on domestic funding is balanced by deep local markets and sizable reserves. Nevertheless, India’s relatively high debt burden and weak fiscal balance limit the amount of space available to respond to successive shocks. India had made key policy choices that support stability well before the recent stress period,” ,” Moody’s said.
The rating agency further said that several large emerging market sovereigns have absorbed a series of major global shocks over the past five years without sharp increase in risk premia or a loss of market access. “This reflects durable improvements in policy frameworks and the build-up of buffers, as well as particularly supportive external conditions,” it added.
However, Moody’s also focussed on large emerging markets like India, Indonesia, Mexico, Malaysia, Thailand, Brazil, South Africa, Nigeria, Turkiye, Argentina over four stress episodes identified by sustained increases in global risk aversion. “These are the onset of the Covid-19 pandemic in early 2020, the global inflation surge and associated US Federal Reserve tightening cycle in 2022, US regional banking stress in early 2023 and renewed tariff tensions in 2025,” it said.