Can the rupee slide be stopped?


Can the rupee slide be stopped?

India’s economy and currency has taken a battering, yet the worst of rupee depreciation should now be behind us.

Economic Analysis

11 September 2013

Rupees

The Indian currency has been the worst performer in Asia so far this year, plummeting to record lows against the US dollar, the stock market fell 10 per cent in a month and bond yields have surged as investors took fright.

The slide in India’s markets are part of a wider exodus of foreign capital from emerging markets prompted by news that the US Federal Reserve is considering scaling back its bond-buying stimulus. That has raised concerns about India’s ability to finance its current account deficit and prompted Prime Minister Manmohan Singh to insist the country had adequate currency reserves and was not heading for a crisis.

But three important developments in June and July point to a more stable future for the rupee, says Sanjay Mathur, Managing Director and Head of Economics Research, Asia Pacific ex-Japan at RBS.

Read the full article on RBS Insight Hub.

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