Page 124 - ES 2020-21_Volume-1-2 [28-01-21]

Does India’s Sovereign Credit Rating reflect its fundamentals No! 107

Figure 35: Long-Term Average Change in Select Indicators during
and after India’s Sovereign Credit Ratings Downgrade (1998-2018)
(i) Sensex Return

(ii) Exchange Rate (INR/USD)

10%
9%
Change Over Previous Year 6% 2%
8%

4%

2%

0%
T-1 0 T+1
Years

(iii) FPI (Equity & Debt)

1500%

Change Over Previous Year 500% -67% FPI-Equity
1000%
FPI-Debt

0%
-114%
-289%
-500%
-759%
-1000%
T-1 0 T+1
Years
Note: 0 signifies year of change in credit ratings
Source: BSE, RBI, NSDL and Survey calculations