Context: The risk of another tantrum remains significant. But India is well placed to survive with limited damage.
A possible repeat of the ‘taper tantrum’ of 2013: Easy money policies since the 2008 crash and to combat Covid-19 is expected to be reversed, causing sharp global interest rate hikes and, thereby, trillions of hot money to cascade out of emerging markets (EMs) like India, Turkey, South Africa, Brazil and Indonesia (Fragile five).
India better placed to limit the damage:
India’s weak links