These graphs tell us why rupee fell, and why it will be up by Sep

The Indian rupee today slumped to an all-time low of 59.93 against the US dollar after the Federal Reserve signalled a tapering of its monetary stimulus, highlighting the country's dependence on foreign capital inflows to fund its current account deficit.

The graphics below by brokerage Anand Rathi explains the rupee fall:

Source:Anand Rathi

Source:Anand Rathi

Source:Anand Rathi

Source:Anand Rathi

Source:Anand Rathi

Source:Anand Rathi

According to the brokerage, the hint of Fed tapering off the QE3 (quantitative easing) led to hammering of currencies of emerging markets (EMs) with large current account deficits (CADs).

South Africa, Turkey, India, Indonesia and Brazil have large CADs and their currencies depreciated sharply in the current currency sell off.

So, maybe, it's now time to check if the rupee is about to bottom out. Anand Rathi certainly seems to think so.


Updated Date: Dec 21, 2014 02:45 AM

Also Watch

IPL 2018: Royal Challengers Bangalore eye revival against Chennai Super Kings as 'Cauvery Derby' comes back to life
  • Thursday, April 26, 2018 In the Kanjarbhat community, a campaign against 'virginity tests' is slowly gaining ground
  • Tuesday, April 24, 2018 It's A Wrap: Beyond the Clouds stars Ishaan Khatter, Malavika Mohanan in conversation with Parul Sharma
  • Monday, April 9, 2018 48 hours with Huawei P20 Pro: Triple camera offering is set to redefine smartphone imaging
  • Monday, April 16, 2018 Rajyavardhan Singh Rathore interview: Sports can't be anyone's fiefdom, we need an ecosystem to nurture raw talent

Also See