Risk of BoP stress remains high: Chetan Ahya

Chetan Ahya, Morgan Stanley said, "The risk of balance of payments (BoP) stress remains high. Unless the govt initiates major policy action to cut its spending including subsidies and/or international crude oil prices decline sharply, India will remain exposed to any potential slowdown in capital inflows. That would increase pressure on the exchange rate, which in turn would keep the domestic cost of capital high."