While going through the RBI and research analyst conference, The RBI addressed four major risk in its latest policy,and biggest and the first imagesrisk factor stems from our vulnerability in the external sector, in particular sudden stop and reversal of capital flows that we saw over the last 10 weeks. It is not clear if financial markets have factored in the full impact of the prospective tapering of QE or whether we will have some spillover impact every time there is some announcement from advanced economies, in particular the US Fed.  Continue reading

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