Indian Rupee Asia's worst performing currency, says Mecklai graph of the day

The Indian rupee has shown immense volatility in the past few months, with rupee dancing to the global indications and in turn losing its own level. The sharp slide from 54.9 in Nov 2012 to a crashing historical low of 61.21 has turned into a nightmare for the Indian government and importers alike. Exporters on the other had have been reaping undeserving gains on behalf of rupee which has taken a severe battering.

The Central bank has made hapless efforts to curb the fall as a depreciating rupee was worsening the current account deficit situation. In the past month the RBI has taken numerous steps to rectify the fall by increasing the MFS (marginal standing facility) rate so that the fleeting corporate money would some how find an attractive trait in the lack luster rupee. The ever increasing absorption of foreign investment has mounted up to USD11 billion out of the USD 20 billion which was diverted into the Indian economies in the month of May. RBI has also restricted the ability of foreign funds to play in the NDF offshore markets as the arbitrage between onshore and offshore markets have sent the premiums and the rupee out of control.

A struggling RBI seems to have lost its hold on the volatile currency and is now uncomfortably awaiting for rupee to find its own level.