Business Standard

Safety in the storm

As the requirement for capital import into India at present is low, the global tornado has modest implications for us

Illustration: Ajay Mohanty

Illustration: Ajay Mohanty

Ajay Shah
Volatility in global financial markets has surged. There are well-known channels through which this influences cross-border capital flows. However, the exposure of the Indian economy is relatively small because the requirement for capital import — the gap between investment and savings — is modest.

On February 6 in Business Standard, I wrote “Uncertainty has declined”, pointing to the fact that the volatility index (VIX) and Merrill Lynch Option Volatility Estimate (MOVE) were at low values compared with those seen in the year following February 2022, where Russian President Vladimir Putin invaded Ukraine and the US Federal Reserve started hiking rates, at
Disclaimer: These are personal views of the writer. They do not necessarily reflect the opinion of or the Business Standard newspaper

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First Published: Mar 19 2023 | 10:00 PM IST

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