REUTERS: The Indian rupee dropped to a record low of 62.03 per dollar on Friday, sparking late intervention from the central bank as its measures to tighten capital outflows raised concerns they could spook foreign investors. The Reserve Bank of India late on Wednesday unveiled rules to restrict how much its citizens and companies can invest abroad and announced additional curbs on gold imports.NYTIMES:
“There is a growing sense of desperation out there, particularly among the young,” said Ramachandra Guha, one of India’s leading historians.
Three events last week crystallized those new worries. On Wednesday, one of India’s most advanced submarines, the Sindhurakshak, exploded and sank at its berth in Mumbai, almost certainly killing 18 of the 21 sailors on its night watch. On Friday, a top Indian general announced that India had killed 28 people in recent weeks in and around the Line of Control in Kashmir as part of the worst fighting between India and Pakistan since a 2003 cease-fire. Also Friday, the Sensex, the Indian stock index, plunged nearly 4 percent, while the value of the rupee continued to fall, reaching just under 62 rupees per dollar, a record low. The rupee and stocks fell again on Monday. Each event was unrelated to the others, but together they paint a picture of a country that is rapidly losing its swagger. India’s growing economic worries are perhaps its most challenging.
“India is now the sick man of Asia,” said Rajiv Biswas, Asia-Pacific chief economist at the financial information provider IHS Global Insight. “They are in a crisis.”EPN-DK: India is on the verge of financial crisis
India on the brink of its own financial crisis
In a reprise of the 1997-98 Asian crisis, India's stock market is plunging, bond yields are nudging 10% and capital is flooding out of the country
India's financial woes are rapidly approaching the critical stage. The rupee has depreciated by 44% in the past two years and hit a record low against the US dollar on Monday. The stock market is plunging, bond yields are nudging 10% and capital is flooding out of the country.THIS COULD DRAG DOWN WORLD MARKETS... STAY TUNED...