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Deutsche Bank: sanctions will affect FDI
Contrary to domestic expectations the Deutsche Bank AG said direct aid from the US, Funds from the World bank and IMF, private bank loans, trade credit, tariffs and non tariffs barriers to trade could be adversely affected by the international sanctions. Highlighting the negative reaction of the equity market to the unfolding events, the communique said the effects would spread to the currency and other markets. These negative trends have come at a time when the economy is experiencing a slowdown, an uncompetitive exchange rate is hampering exports and public finances are deteriorating. It also said international sanctions will lead to the halting of bilateral trade with the US and Japan is expected to follow suit. Although the direct impact of these moves are not expected to be serious as bilateral grants account for only $300 million, the indirect implications are far more serious. The indirect impact on multilateral loans are of concern as India received loans almost equivalent of the foreign direct investment form the World Bank over the past year.