When money takes a tumble

While the Indian Rupee has crossed the 65 mark against the dollar and has breached the 100 mark against the British pound,most of the other emerging market currencies are facing a similar fate.

Leading the pack is the Brazilian real,which has fallen the most. Since May 1,the real has tanked by 22 per cent against the dollar,against the fall in rupee by almost 20 per cent in the same period.

Other major losers include the South African rand,Indonesian rupiah and Turkish lira,which have all lost over 10 per cent against the dollar. While the rand has slipped by 15.3 per cent since May 1,the rupiah and lira fell by 11 per cent and 10.9 per cent respectively. The Mexican currency peso fell by 9 per cent and the Malaysian ringgit and Russian rouble depreciated between 7 and 9 per cent.

The fall in currencies however has not been in sync. There are some that saw their currencies slide significantly in May and June,but have managed to restrict their fall since then. Peso and rand fell sharply against the dollar in May and June but have since recovered. Since June 3,the two have depreciated by only 2.4 and 3.7 per cent respectively. Experts feel that Mexico exports crude while South Africa has gold,which has helped them perform better.

It is interesting to note that India’s Asian peers,China and South Korea,which are strong exporting nations,have seen no impact of the US quantitatively easing withdrawal plan on their currencies. Their currencies have remained more or less flat against the dollar. Since May 1,Chinese yuan has appreciated by 0.6 per cent,and the South Korean won has fallen by only 1.96 per cent.