Talk of Tightening in the U.S. Hammers Currency in India

Photograph by Adeel Halim/Bloomberg

With Federal Reserve Chairman Ben Bernanke signaling an end to quantitative easing, investors are looking ahead to rising interest rates in the U.S.—and rethinking their willingness to tolerate risky emerging markets. As they do, India’s currency is taking a particularly painful beating. The rupee fell to a record low today, dropping the most in 21 months. Since April 1, the rupee has tumbled 9.2 percent, making it the worst-performing currency in Asia. The currency may continue weakening, with rupee three-month forwards dropping to 60.64 per dollar.

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