It seems there was little success from the Indian central bank’s latest efforts to prop up the country’s sliding currency without choking off economic growth.
The rupee plunged to a record low on Wednesday.
Moves by the Reserve Bank of India have succeeded only in pushing up interest rates on government bonds which posed a fresh threat to the weakening economy.
Investors continue to take fright and are losing confidence. Kelvin Tay, the regional chief investment officer for southern Asia Pacific with UBS Wealth Management said: “What we need from India right now, what we need from the central bank and the government is basically consistency and credibility in the policies that they’re likely to put forth to address this issue. As the days go by, as the India rupee depreciates further, they are running out of options.”
The rupee and other currencies have been affected by the expected winding down of money printing by the US Federal Reseve as part of the end to stimulus there.
Also heading sharply lower are the Indonesian rupiah and the Turkish lira despite supportive words and actions from those countries’ central banks.