The beleaguered currency falls to record lows of 64.45 against the dollar despite India intervening in the markets yesterday. They are back intervening today around the 64.40 levels traders are reporting.
USD/INR Monthly chart 21 August 2013
As of the beginning of August India was said to have around $249bn in USD reserves but it is speculated today that they want to lease out 200 tonnes of gold it bought from the IMF (for $6.9bnb in 2009) to raise dollars for intervention. Leasing the gold would give them access to around $23bn.
In equities, India’s Sensex is down 2.0% while the Niffty 50 index is down 1.37% today. The Indonesian stock index is up 1.04% after coming off 5.8% at one point yesterday.
On the face of it it all seems to be getting a bit frantic over there despite the deputy economic minister trying to calm the markets yesterday. Stocks are still bleeding and the Indian government are using up their reserves on intervention. There doesn’t seem to be a real contagion kicking in yet but if the Indian dam breaks it will spill over into other markets.
