India’s rupee hit another record low against the dollar on Wednesday, despite policymakers taking fresh measures to try to put a floor under the sliding currency and stave off a full-blown financial crisis.
Until recently, India was constantly bracketed with China as an inexorably rising economic power; but with growth slowing sharply, the country is now among the hardest-hit of a string of developing countries that look dangerously exposed to violent swings in global markets.
When central bankers embarked on the drastic policy of quantitative easing – untested on such a large scale – they always knew it was extremely risky but judged that the price of a prolonged slump across the rich world was greater than the threat of inflating unsustainable bubbles in the world’s financial markets. That judgment is about to be put to the test.
via The Guardian
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