US Fed rate hike may pull down

Mumbai: If the US Fed increases the interest rates on Thursday/Friday and this has a spillover effect on emerging market currencies including India, the rupee  on a sustained basis could depreciate between 5 per cent to 10 per cent. 

 

This was revealed in the India Ratings study on the vulnerability of the top 500 Indian corporates to the external financial shock  which also adds that this report is not a forecast of the rupee level in case of a spillover effect. 

 

Deep N. Mukherjee, senior director, corporates, India Ratings & Research said, “While the aggregate credit profile of top 500 borrowers continues to hover around the worst in a decade, the incremental impact of a currency shock will be limited.” 

 

Among the top 500 corporates by size of balance sheet debt, 13 corporates have a worrisome combination of high leverage and high negative sensitivity. The median standalone debt is Rs 23,400 crore, the report said.