Indian rupee<\/a> fell 2.2% this quarter as global funds pulled $4 billion of capital out of the country\u2019s stock market, the most among regional markets where data is available.<\/p>\n\u201cThe monetary policy divergence and widening current account gap have set depreciation in the rupee in the near term,\u201d said B. Prasanna, head of global markets, sales, trading and research at ICICI Bank Ltd in Mumbai.<\/p>\n
Depreciation in the rupee is a double-edged sword for the Reserve Bank of India. While a weaker currency may support exports amid a budding economic recovery from the pandemic, it also poses a risk of imported inflation and may make it difficult for the central bank to maintain interest rates at a record low for longer.<\/p>\n
QuantArt Market Solutions expects the rupee to fall to 78 per dollar by end-March, falling past the previous record low of 76.9088 reached in April 2020, while a Bloomberg survey of traders and analysts forecast the rupee at 76.50. The rupee is set to drop about 4% this year in a fourth straight year of losses.<\/p>\n
Foreign exodus from stocks has led to the benchmark S&P BSE Sensex Index falling by about 10% below an all-time high touched in October. Despite that, the one-year forward price-to-earnings ratio for Sensex is near 21, compared to 12 for MSCI\u2019s Emerging Markets Index, meaning there\u2019s room for the equities to fall even further. Bonds have seen $587 million of outflows this quarter.<\/p>\n
Bearish rupee calls are rising as India\u2019s trade deficit widened to an all-time high of about $23 billion in November amid higher imports. The ample liquidity in the banking system, partly created by the RBI\u2019s dollar purchases, may make it difficult for the central bank to intervene to the same extent in 2022 to curb the rupee\u2019s losses, according to Goldman Sachs.<\/p>\n
Unhappy Indians state that in 2014, the rupee was \u20b963 per 1 US dollar, but now is \u20b976; however, the promise of PM Modi was to make it to \u20b940, a promise that failed, they say.<\/p>\n
You might also want to read<\/p>\n
https:\/\/www.hamslive.com\/news\/2021\/03\/20\/mamata-modi-destroys-economy-of-this-country-note-bandi-to-bank-bandi\/<\/p>\n
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