With the Union government making it clear despite Friday’s concerted attack on the rupee that it will not reverse the capital control measures introduced to stop the decline of the nation’s currency’s, the markets resumed their attack on the rupee on Monday. Our currency tumbled by 148 paise against the dollar, the single largest drop in a decade, while the Sensex slumped by 291 points. The 50-issue NSE CNX Nifty too dipped by 93.10 points (1.69 per cent) to end at 5,414.75, the lowest close since September 2012.
Foreign institutional investor (FII) selling in shares of banks, auto, pharma and FMCG eroded Rs 1 lakh crore in investor wealth, with the Sensex ending at a four-month low of 18,307.52, a drop of 290.66.
The US-led Western countries and their collaborators in the Indian corporate sector, bureaucracy, academia and media have been insisting that the government must roll back the capital control measures. After Friday’s forex and stock market bloodbath, the country’s top business chambers had issued unusually strong statements toeing America’s stand against the government’s capital movement restrictions.
The rupee opened sharply lower at 62.30 a dollar on Monday from Friday’s close of 61.65 and continued to slide throughout the day, touching yet another all-time low of 63.30 against the US greenback. Before the end of the day’s trading, however, it rose marginally to end at 63.13, recording the single biggest fall in a day in more than 10 years.
Finance Minister P Chidambaram was closeted with his top officials, reviewing the situation. But unlike Friday, none offered comments on either the fall in the rupee or the Sensex crash. On a day when the financial markets melted, the price of gold eased a bit, slipping from an eight-month high.
It lost Rs 165 to end at Rs 31,360 per 10 grams in the national capital on Monday while the precious metal ended Rs 40 higher at Rs 31,365 in Mumbai. The fall in the rupee’s value would mean further problems in controlling the current account deficit (CAD).
Foreign institutional investor (FII) selling in shares of banks, auto, pharma and FMCG eroded Rs 1 lakh crore in investor wealth, with the Sensex ending at a four-month low of 18,307.52, a drop of 290.66.
The US-led Western countries and their collaborators in the Indian corporate sector, bureaucracy, academia and media have been insisting that the government must roll back the capital control measures. After Friday’s forex and stock market bloodbath, the country’s top business chambers had issued unusually strong statements toeing America’s stand against the government’s capital movement restrictions.
The rupee opened sharply lower at 62.30 a dollar on Monday from Friday’s close of 61.65 and continued to slide throughout the day, touching yet another all-time low of 63.30 against the US greenback. Before the end of the day’s trading, however, it rose marginally to end at 63.13, recording the single biggest fall in a day in more than 10 years.
Finance Minister P Chidambaram was closeted with his top officials, reviewing the situation. But unlike Friday, none offered comments on either the fall in the rupee or the Sensex crash. On a day when the financial markets melted, the price of gold eased a bit, slipping from an eight-month high.
It lost Rs 165 to end at Rs 31,360 per 10 grams in the national capital on Monday while the precious metal ended Rs 40 higher at Rs 31,365 in Mumbai. The fall in the rupee’s value would mean further problems in controlling the current account deficit (CAD).