The rupee has shown a sudden turnaround. It staged a strong recovery after hitting the skids over the last few months. According to an Economic Times report, the rupee crashing below 60 to a dollar was a capitulation trade that was clearly overdone. Given market data and the likely trajectory of the global economy, the Indian currency could actually exceed expectations here on, regardless of the US Federal Reserve's tapering programme.
India is among the five largest economies on the basis of purchasing power parity, and is among the most open with international trade now nearly 50 per cent of GDP. Clearly, it can no longer be insulated from global market and risk developments.
The ET report further mentions that though economic growth hit a record low of 5 per cent in the financial year ended March 2013, apart from China, India still has the highest growth rate among all economies with a GDP of around $2 trillion or more.
Read the complete report here