This article discusses how India could be the most vulnerable to the rising interest rate in the US. According to the article, high-interest rates would result in capital outflows from emerging economies as investors would prefer high yields. In the past, India had a high rate of sell-offs when the US tightened its monetary policies. The present conditions of the Indian economy are not good and there is a high risk of further deterioration.
https://www.cnbc.com/2018/03/21/credit-suisse-india-is-vulnerable-when-interest-rates-rise.html
2 comments:
It would be interesting to see how the rising interest rates in the US would affect the Indian economy in the long run, and whether tax cuts in India would be the alternative to boost spending rather than saving.
It would be interesting to read more about what the government and central bank in India are planning, and how they plan to keep investors in the country and not move the inversions to the US. They could try to also increase their interest rates in order to have higher yields and well as the US, but this could also cause many problems in the economy since they are not doing well currently. We will see how India tries to solve this problem, and what investors decide to do.
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