WisdomTree Indian Rupee Fund (NYSEArca: ICN) was trading near its recent all-time low on Tuesday after former IMF economist Raghuram Rajan was appointed the new chief of the Reserve Bank of India.
The rupee currency ETF is down over 10% the past three months, falling to a record low. The rupee’s drop has weighed on ETFs that invest in India’s stock market. [India ETF Lowest Since 2009 on Plunging Rupee]
The rupee pared its loss Tuesday on speculation India’s central bank sold dollars to stop the currency bleeding, Bloomberg reports.
“Intervention can help curb the rupee’s weakness in the short term,” Rupa Nitsure, an economist at Bank of Baroda in Mumbai, told Bloomberg. “The rupee will get sustainable support if India is able to attract inflows.”
“Still, traders say the RBI can only do so much to defend the rupee given the country’s record current account deficit, which does not directly respond to monetary policy tools and is the key source of stress behind the currency,” Reuters reported Tuesday.
WisdomTree Indian Rupee Fund
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