‘Indian Rupee now Asia’s worst currency’

ISLAMABAD: The Indian rupee has been described as Asia’s worst-performing emerging market currency by the New York-based financial and media company, Bloomberg, with its recent report also suggesting that foreign funds are fleeing the country’s stocks.

The recent damning report that spurted social media trolling of Indian Prime Minister Narendra Modi across India, says currency declined 1.9 per cent this quarter as global funds pulled $4.2 billion of capital out of the country’s stock market, the most among regional markets where data is available.”Foreigners sold Indian stocks as Goldman Sachs Group Inc. and Nomura Holdings Inc. recently lowered their outlook for equities, citing lofty valuations, at a time when concerns about the omicron virus variant are roiling the global markets.

Record-high trade deficit and the central bank’s policy divergence with the Federal Reserve have also impinged on the rupee’s carry appeal, “ said the report.Quoting expectations from QuantArt Market Solutions of rupee declining to 78 per dollar by end-March, falling past the previous record low of 76.9088 reached in April 2020, it mentions a Bloomberg survey of traders and analysts forecasting the rupee at 76.50.

The rupee is set to drop about 4 per cent this year in a fourth straight year of losses, the report said. “Bearish rupee calls are rising as India’s 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’s dollar purchases, may make it difficult for the central bank to intervene to the same extent in 2022 to curb rupee’s losses, according to Goldman Sachs, said the report.