In India, most rated Indian corporates and banks can withstand the recent sharp depreciation in the rupee since their overseas borrowings either have dollar-linked earnings or are hedged, S&P said.
Indian rupee has fallen over 12 per cent this year and is currently hovering around 73 to a US dollar.
"Nevertheless, a deep and sustained decline in the currency could have broader economic effects on Indian corporates, including through knock-on effects of inflation and higher imported commodity costs squeezing margins. This would also result in an adverse impact on bank's asset quality, and may delay the recovery of Indian banks," S&P said.
S&P Global Ratings said that it sees low risk from currency depreciation for companies in India, China and the rest of Southeast Asia and South Africa, while those in Argentina and Turkey are the most vulnerable to depreciation. The rest of Latin America and Indonesia are in the medium-risk category.
The US-based agency said for many emerging market countries, the pace of currency depreciation has been less severe relative to the 'taper tantrum' and the global and Asian financial crises.
Factors like rising trade tensions, tightening of monetary policies in advanced economies, and the dollar's strength will continue to test emerging markets, it said.
"Interest-rate normalisation, combined with uncertainties around global trade and desynchronising global growth, is exacerbating pressures on emerging market currencies," S&P Global Ratings economist Vince Conti said.
"Nevertheless, the uneven movements across emerging markets show investors are discriminating based on economic fundamentals and policy frameworks," Conti added.
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)