Fourth, Conservative accounting norms followed did not allow banks to book unrealized gains. Fifth, as a one time measure, banks were allowed to transfer securities to HTM, after booking the MTM losses against these. Thus, banks in India, in general, have the resilience to withstand some rise in interest rates.
Impact on the real sector Readjustment of the currencies would also have implications for the real sector. Significant readjustment of the currencies and rise in interest rates could slow down the global growth. This would entail a reduction in export opportunities and reduction in investment demand for EMEs, in general, many of which depend on export demand to sustain their growth.