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In an op-ed, Prof. Viral Acharya weighs the impact of investor sentiment in India

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Excerpt from Livemint -- "What should perhaps come as a surprise is that until recently, the investor view and pricing of India’s currency and markets hardly seemed to reflect the ground reality. The expansion of monetary base due to unconventional central bank policies in the Western economies, especially in the US, found its way readily into the Indian debt and equity markets. These flows, however, abruptly reversed themselves since the announcement in May of the potential tapering of the US Federal Reserve’s expansionary policies. The sentiment on India has since turned bearish, its asset and currency markets have suffered quick and massive depreciations, and its structural weaknesses for generating future growth have all of a sudden come to the fore."

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