By knocking off the peg to the Euro, SNB sent shivers down trader spines... and RBI just saw its small token move of .25 bp cut knocked off headlines. The token move has been negated by the substantive, decisive Swiss National bank move. ( That SNB move was a great lesson in central banking and in management)
The Indian corporates are not decoupled from the global market and the impact on Indian exporters is going to be substantial There will be red lines all over exporter balance sheets if the volatility in currency markets does not stop and this is not on the radar at all.
With the fall in euro and dollar and remergence of the Swiss Franc as a safe haven , and with gold back in the reckoning (for whatever little time frame) , there is volatility and exporters are likely to be adversely affected. If any Indian corporate has borrowed in CHF, then that is a serious funding case. Banks may see adverse impact too as their clients falter; NPAs are likely to be aggravated as clients wobble holding invoices which have lesser value...
A day for sellers on Mumbai Stocks, it looks like.
Views expressed without risk or responsibility
The Indian corporates are not decoupled from the global market and the impact on Indian exporters is going to be substantial There will be red lines all over exporter balance sheets if the volatility in currency markets does not stop and this is not on the radar at all.
With the fall in euro and dollar and remergence of the Swiss Franc as a safe haven , and with gold back in the reckoning (for whatever little time frame) , there is volatility and exporters are likely to be adversely affected. If any Indian corporate has borrowed in CHF, then that is a serious funding case. Banks may see adverse impact too as their clients falter; NPAs are likely to be aggravated as clients wobble holding invoices which have lesser value...
A day for sellers on Mumbai Stocks, it looks like.
Views expressed without risk or responsibility
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