We know that the Chinese Yuan is weak. And that apparently is making the rupee weak, and as we noted, RBI is setting up its firepower and strongly defending 68 (by selling dollars). But look at how other emerging markets have done. Brazil, Russia and South Africa have seen the dollar rise more than 40% compared to their currencies in the last year. India’s only seen a 7% rise, and China, 6%. India is relatively decent, and our fears about a large fall are valid given our corporate and bank borrowing abroad. But imagine the same situation for Brazil, Russia and South Africa! This is largely due to the devaluation in the last few months – if India’s fretting about the rupee dropping, it’s more than just India, and in fact it’s much more than just India. The Chinese Yuan too hasn’t fallen that much; and in 2016 itself, the comparison shows you how bad the situation is for Russia and South Africa.… (Read On…)
[via Capital Mind]
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