Rupee measures stop-gap; risky dependence on hot money

Indian rupee has relatively outperformed other currencies in the last 1 month on measures like raising investment limit for foreign investors in debt,decontrolling NRE deposit rates,but these are stop-gap measures which can only temporarily stabilise the rupee,says Credit Suisse.

The research house says,these moves can cause vicious cycles should they reverse-in our view,this warrants lower P/E multiples for the market.

India8217;s central bank recently raised foreign investor debt investment limits by 10 billion,which was followed by decontrol of deposit rates on non-resident external deposits.