Asia’s worst-performing currency

Since India is one of the largest importers of crude oil, it is more vulnerable.

“The INR is more sensitive to supply-side oil shocks,” Barclays said in a note. “Geopolitical risks will likely stay elevated, especially on the terms of trade shock and [India’s] current-account deficit implications.”

An exodus of foreign money

Owing to global risk aversion and increasing inflationary pressures, foreign investors have pulled out a significant amount of their funds from Indian assets. In 2022, overseas investors withdrew total funds worth $4.14 billion, out of which $2.3 billion has flown this month itself.

Today, the benchmark stock indices—Nifty50 and Sensex—fell to the lowest since July 2021.

Analysts estimated the initial share sale of India’s largest state-run insurer Life Insurance Corporation of India, widely referred to as India’s Aramco moment, would have fetched $5 billion-$6 billion of foreign inflows, thereby supporting the rupee.

However, its delay to the next fiscal year has paved the way for further fall in the Indian equities.

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