The Indian rupee is getting crushed by its own central bank

INDIA WATCH

Bloomberg/Kartik Goyal

“The Reserve Bank of India’s efforts to support the flagging economy are turning out to be a bane for the rupee. The currency is the worst performer in emerging Asia this quarter, and analysts say that’s because the central bank is mopping up dollars gushing into local stocks and bonds.”

USAGOLD note:  None of this, of course, has been lost on the gold market when priced in terms of the Indian currency – up 17.5% thus far in 2019. There is much talk of gold imports declining as prices increase, but as long as the currency is in decline investors will add gold to their holdings to hedge against the possibility of it going from bad to worse.

line chart showing gain in gold priced in India rupee

Chart courtesy of TradingView


Repost from 11-3-2019

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