The country’s external sector remains robust, and we are confident we will be able to absorb significant shocks originating from external sources. The movements in the domestic financial assets – including the stock market and exchange rate – will continue to be dominated, in the near-term, by changes in the global investor sentiment.
The global investor is hard-wired to be binary – he is either risk ON or risk OFF. Depending on the balance of risks between AEs and EMEs, funds can move across markets swiftly and in surges.