Rupee plunges below 66.49/dollar, lowest in two years

Since the panic got triggered from China over its slowdown worries and its impact on the world markets, the worst of the brunt was suffered in the Chinese markets, spreading to Hong Kong, Taiwan, Japan, Australia and later in the day to Europe.

“Rupee is following the equities fall”.

The US currency is slowly recovering from the damage it suffered last week after a surprise decision by the People’s Bank of China to devalue the yuan.

The attempt is viewed as a tack-tick to corner the global export markets from other emerging trading powers such as India and the Asean (Association of Southeast Asian Nations) grouping. This was the biggest devaluation of Chinese currency since 1994. India’s narrowing fiscal deficit, low current account deficit, low short-term liabilities, and moderate inflation will help the country weather a global slowdown, he added.

While the Finance Ministry Arun Jaitley may need stated it was short-term and that together with the RBI Governor Raghuram Rajan, they sought to appease the frayed nerves and stated fundamentals of Indian markets stay robust, the injury has been finished for the day. “Though unrelated, the stock market crash can transform into further yuan devaluation to perk up the economy“, Nevgi cautioned. The yuan has fallen by 4.6 percent till now since August 11.

Why did the Indian stock market crash today? (Source: The Wall Street Journal, last accessed August 24, 2015.) These fears are not unfounded, as the Shanghai Share Index fell by 7.7% to a five-month record low, causing both Indian and global traders to rush to minimize their exposure. While the Indian basket typically follows Brent crude movements, the exchange rates play an important role for prices in rupee terms.

“I wish to reassure the markets that our macroeconomic factors are under control as the economy is in much better position relative to many other economies”, Rajan said at a banking summit.

“The extended slide in oil prices has cast doubts on the chances of a Fed rate hike”.

The central bank managed to add $ 34 billion through inflows from foreign currency deposits and a concessional swap facility for banks.