With the Indian economy having taken a massive hit from the coronavirus crisis, it is expected that this will push the rupee further down towards an unprecedented 80-per dollar level.
Based on a Bloomberg report, some financial analysts believe this decline is likely given the strong link between the Indian rupee and economic growth.
Though global funds have invested $4.5 billion into local stocks this quarter, the highest in the region. A large part of these flows comes from a rights offering by Reliance and stake sales in Kotak Mahindra Bank Ltd. and Bharti Airtel Ltd., while another $15.2 billion comes by way of FDI inflows from deals for Mukesh Ambani’s digital unit, JioPlatforms Ltd. Nonetheless, these inflows have not helped slow the decline in the rupee, which is so far down almost 6% in 2020. The Indian rupee is the only Asian currency to have weakened against the dollar this quarter even as others have recovered from the COVID19-induced selloff seen earlier in the year.