Big danger from a declining rupee for India
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ndia may face its worst financial crisis in decades if it fails to stem a slide in the rupee, leaving the central bank with a difficult choice over how to make the best use of its limited reserves to maintain the confidence of foreign investors.
Unlike most of its Asian peers, India routinely runs large current account and fiscal deficits. That means it must attract sufficient foreign money, namely dollars, to close the gap, and a weaker home currency makes that costlier. What makes the current situation so worrisome is that India is grappling with big internal and external economic threats simultaneously: Growth is slowing. Inflation remains high. Political paralysis has stymied domestic overhauls... http://www.deccanherald.com/content/210954/big-danger-declining-rupee-india.html
The Rupee is getting close to implosion. While everyone was worried China would be the 500 lb. domino to fall, it could well be the health of the Indian economy that holds the world out of a greater depression.
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