The Indian rupee fell today on concerns that a decrease of foreign capital inflows will lead to widening of the country’s current account deficit, which is already at the record level.
Market participants are concerned that the gap, which on an annual basis was at the record 4.2 percent of gross domestic product a year ago, may climb much higher this year in case inflows of foreign capital dry up. Global funds added a total $491 million of Indian stocks in the period from March 1 to March 7. The rupee rallied briefly as the trade deficit narrowed from $20 billion in January to to $14.9 billion in February, but the rally has failed.
USD/INR rose from 54.3505 to 54.4175 as of 15:01 GMT today after falling to 54.1700.
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