Indian rupee has
dropped by nearly 4% to a new low of 68.7 to the US dollar amid growing
concerns over the health of the country's economy.
The decline comes a
day after India approved infrastructure projects worth $28.4bn (£17.7bn) to try
to revive the economy and prop up its currency.
The rupee has lost
20% of its value this year and is one of the world's worst-performing
currencies.
It has also been hit
by fears that the US will scale back stimulus measures.
The US central bank
has sought to increase liquidity in the US economy, through its policy of
quantitative easing, in an attempt to boost growth.
A part of that
liquidity has flowed into Asian markets, such as India, and lifted stock and
asset prices.
However, the Federal
Reserve has said it will scale back the programme if the US economy improves,
with some analysts expecting this "tapering" to begin as soon as next
month.
That has seen
investors pull money out of emerging markets, hurting currencies and stocks in
those countries.
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