Indian Rupee On Its Way to 69

The Indian rupee has dropped by nearly 4% to a new low of 68.7 to the US dollar amid growing concerns over the health of the country’s economy.

The decline comes a day after India approved infrastructure projects worth $28.4bn (£17.7bn) to try to revive the economy and prop up its currency.

The rupee has lost 20% of its value this year and is one of the world’s worst-performing currencies.

It has also been hit by fears that the US will scale back stimulus measures.

The US central bank has sought to increase liquidity in the US economy, through its policy of quantitative easing, in an attempt to boost growth.

A part of that liquidity has flowed into Asian markets, such as India, and lifted stock and asset prices.

However, the Federal Reserve has said it will scale back the programme if the US economy improves, with some analysts expecting this “tapering” to begin as soon as next month.

That has seen investors pull money out of emerging markets, hurting currencies and stocks in those countries.

via BBC

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza