Strong economic fundamentals crucial for countering dollar strengthening: Mythili Bhusnurmath

Mythili Bhusnurmath, Consulting Editor, ET Now, shares her views on the strengthening dollar index, and what it means for EM currencies. Excerpts:

ET Now: The dollar index has made fresh record highs. How do you view this development?

Mythili Bhusnurmath: With the US economy poised to look up, the dollar index is certainly going to go up. All the emerging market currencies will take a hit as a consequence. These currencies will be in line for even bigger hits as and when the US Fed decides to hike interest rates.

The dollar will clearly be on the upswing, and naturally emerging markets will feel the heat. It comes down to how strong the fundamentals of an economy are. To the extent that we have strong fundamentals, we will not feel the impact very deeply.

Therefore, now is the time for us to repair our roof while the sun is still shining. There is the clear message going into 2015.