Don’t expect much rupee appreciation as India nears elections
Ask me if traders in the forex market expected a big fall in the Indian rupee and my answer will be yes. It was the magnitude of the fall that really shocked everyone.
The news of tapering as well as the flight of capital from the debt market did the trick. By the first week of July, the rupee had already touched the 60-mark. The market was full of doom and gloom where some said that it might even touch 75. What is strange is that everyone started to talk about the current account deficit (CAD) and inflation numbers only after the fall and when the rupee touched Rs 61.20, the market truly panicked.
(This story appears in the 24 January, 2014 issue of Forbes India. To visit our Archives, click here.)