Falling rupee, stock markets to impede India’s growth

Falling rupee, stock markets to impede India’s growth

Muscat: With the Indian rupee at an all-time low and the stock markets falling an industry expert said that like other countries, India could enter an economic slowdown phase.

“This is shown by the Indian central bank’s reduced growth projections during which the stock market could go into consolidation,” said Farah Mourad, Senior Market Analyst at XTB Mena.

“This is particularly true while inflation remains high and central banks continue tightening their monetary policy. As a result, the rupee could continue to depreciate against the dollar while the latter is supported by the Federal Reserve,” she added.

As the rupee comes under further pressure, the Indian authorities have also been raising interest rates that could help support it by reducing the interest rate differential against the dollar.

“Such an operation was executed successfully by the Russian central bank to shore up its currency after the invasion of Ukraine. Establishing settlements in rupee for India’s large oil imports could also reduce pressure on the currency. A more stable currency could help attract foreign investors to the stock market and shore up prices,” she further said.

Although Indian expats in Oman and other GCC countries can enjoy a higher exchange rate for the rupee, Farah Mourad cautioned