Rupee may rebound if crude keeps falling

The last fortnight was excellent for big stocks. The Nifty is very close to an all-time high and looks capable of going north but smaller stocks have continued to take a hammering

The rupee hit a new low on Friday before it recovered to some degree. That was driven by a plunge in the Yuan’s value, which dragged down most Asian currencies in “sympathy”. However, the stockmarket rose on Monday, driven by the revamping of GST over the weekend. Crude oil prices have also abated slightly, bringing some relief to India’s external account and we may see a rupee rebound if crude continues to trend down.

Since April, the RBI has expended over $21 billion from Reserves. Part of this was in direct defence of the currency. The rest of the drain came