20% Fall History

wealthymattersIn 2008, when Lehman Brothers imploded on September 15, the Rupee, which had by then slipped a bit from its sub-39 all-time high to around 41, fell sharply and by the time the music really stopped, about 3 or 4 months in, to over 50 to the dollar, a decline of 20%.

In August 2011, when the US debt downgrade followed by the exploding of the European sovereign debt crisis (courtesy Greece) hit emerging markets like a bomb,the Rupee, which had been hovering between 44 and 46 for several months – during which, incidentally, both exports and imports were growing like gangbusters – collapsed in a near-straight line, triggering RBI action on December 15, tightening rules and squeezing liquidity. When the dust had cleared – or so it seemed – the rupee had lost over 20% and there was blood all over corporate balance sheets (and, of course, profit and loss statements). The banking system is still recovering from this.

This time round,the fall so far is just half of that in the previous two cases.


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