As concerns over the Federal Reserve scaling back its monetary stimulus rise once again, is the Indian rupee at risk of repeating the violent selloff that took place in May-August?
The rupee has come under renewed pressure over the past two weeks, falling over 3 percent against the U.S. dollar to trade at a two-month low of 63.50 on Tuesday.
“The biggest factor seems to be the back-up in U.S. Treasury yields, the rupee is the most sensitive currency to U.S. yields in the emerging markets space,” said Mitul Kotecha, head of global foreign-exchange strategy at Credit Agricole.
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