Underlining India’s key positive points like low dependence on foreign-currency borrowing and significant build-up of foreign exchange reserves, the global rating agency, Moody’s Investor Service in its latest report has said that India is among the countries least vulnerable to currency pressures as a result of a stronger dollar.
The rating agency further noted that the country is less dependent on foreign-currency borrowing to fund its debt burden and this limits the risk of currency depreciation transmitting into materially weaker debt affordability. As per report, India’s significant build-up of foreign exchange reserves in recent years to all-time highs also helps the country to mitigate external vulnerability risk. It also added that the country is benefitted from its large and relatively stable domestic financing base for government debt, which contributes to the economy's resilience by sheltering it from abrupt changes in external financing conditions.
Further, the report said that the average debt maturity of India is close to 10 years and over 96 percent of it is in local currency, even though the country’s debt affordability is relatively weak. Apart from India, the agency also underlined Brazil, China, Mexico and Russia as the least vulnerable countries to currency pressures.