India ETFs Fall 4% as Rupee Hits Fresh Low
August 16th 2013 at 9:39am by John Spence
WisdomTree India Earnings Fund (NYSEArca: EPI) was down nearly 4% in early trading Friday as the rupee plunged against the dollar in the wake of the Reserve Bank of India’s measures to limit currency outflows.
The RBI on Wednesday announced more curbs on the amount of money at individuals and companies can send out of the country.
“There is a complete lack of faith in the markets. There are fears that the RBI (Reserve Bank of India) measures may not help improve the rupee,” said Param Sarma, chief executive with NSP Forex, in a BBC News report.
WisdomTree Indian Rupee Fund (NYSEArca: ICN) is down about 9% the past three months. [India ETFs: A Train Wreck Awaits]
The latest steps from the RBI “raised concerns of outright capital controls that would further undermine the confidence of foreign investors and also that they did not address the need to attract overseas investments to narrow the record high current account deficit,” Reuters reports.
“The government steps, the way these things have been done – they haven’t sent out a consistent message,” said ICICI Securities’ head of research in a Financial Times article. “If you look at the fundamentals, the trade deficit has improved. But the problem is that sentiment is quite adverse to the rupee.”
WisdomTree India Earnings Fund
The opinions and forecasts expressed herein are solely those of John Spence, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.