The dollar keeps hammering the rupee, and there's no end in sight. We've crossed 90, briefly touched highs near 92 in late January, and now hover around 90.18. The rupee has collapsed 6.16% over the last 12 months, bleeding value faster than any other Asian currency. This isn't a temporary dip anymore. This is a rout.
American interest rates are crushing India. Money is flooding out at an alarming pace. Nearly 3 billion dollars pulled out from Indian equities just in January alone, adding to the roughly 18 billion that fled last year. Foreign investors don't care about India's growth story when US Treasury bonds offer fat returns without the risk. The dollars are leaving, and they're not coming back.
India's import addiction is making things worse. Gold imports shot up 200% in October. India is hemorrhaging dollars on crude oil, electronics, gold – everything the country can't produce itself. Every shipment that arrives pushes the rupee down another notch. India earns less than it spends, and the gap keeps widening.
The Reserve Bank tries to intervene, selling dollars here and there to stop the freefall. But they know they can't fight this forever. They're just buying time, hoping global conditions shift. Meanwhile, exporters are celebrating their windfall profits while everyone else watches prices climb. Imported goods cost more. Fuel costs more. Everything tied to the dollar keeps getting expensive, and the rupee keeps sinking.
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