India’s no longer ‘fragile’, can weather global market volatility

In the face of global financial market turbulence, India’s rupee appears more resilient due to a narrowed current account deficit (CAD) and bolstered forex reserves. Increased exports post-pandemic buffered the CAD, keeping it manageable at 2% in FY23 despite soaring commodity prices. Forex reserves, standing at over $600 billion, fortify the RBI’s ability to stabilize the rupee, marking a significant contrast to a decade ago when India was tagged among the ‘Fragile Five’ economies. Forecasts project a reduced CAD and stable rupee for the upcoming fiscal years.