Rupee takes a battering

Synopsis

The Indian rupee faces significant challenges, plumbing new lows against the dollar and on track for its worst performance in nearly 20 years. This decline is not isolated, as the Indonesian rupiah and Thai baht also experience pressure. David Pilling, the FT's Asia editor, discusses the impact of the Syrian situation on oil prices, which is particularly concerning for India, a major oil importer. Since May, the rupee has struggled due to concerns over U.S. interest rate hikes and India's large current account and fiscal deficits. Growth in India has slowed dramatically, nearly halving over the past two years, leading to market dissatisfaction with the slow pace of reforms. The situation highlights broader issues affecting emerging markets, particularly those with significant current account deficits, as they navigate a changing interest rate environment.