Global geopolitical uncertainty impacts most Asian currencies
More value for expats as Indian rupee plunges to six-month low
“The Indian expats who live in Oman and other countries are very happy, because the exchange rate is now better, and the IT industry is cheering, because they get more value for money for their services,” Madhusoodhanan added. “My feeling is that there is nothing to worry about yet, but this trend will continue for some time.”
The global geopolitical uncertainty, which included US President Donald Trump’s trade tariffs on China, and the ongoing protests in Hong Kong, a major business hub, have not just impacted the Indian Rupee, but many other Asian currencies as well.
Madhusoodhanan continued, “There is a fear of global recession, so the central banks are reducing their interest rates, which means there is a threat on growth. These banks are taking steps to reduce their interest rates, and when this happens, people will move their investments to safer currencies. People are currently investing in gold, which is why its price has increased slightly.”
Exchange rate is now better and the IT industry is cheering
Indian economy
He said: “As far as India is concerned, the Indian economy is a big importer of gold. Just like oil, any import of gold will also have an impact on the Indian Rupee. On top of this, there was some concern that the government was going to impose taxes on foreign portfolio investments (FPIs) in India.”
“This was taken negatively by foreign investors and resulted in an outflow of money from the stock market,” he further added.