If the US is bottoming out, India still has a ways to go. There are complex and insufficient regulations, low to no transparency, a denial-oriented mindset, and no previous experiences with market crashes. October saw $24B in fx come out of India (from some $300B in reserves), the $ became as expensive as Rs 50 (up from 43 a month ago), and the commercial paper markets froze completely. The central bank has kicked in and helped bring the $ down to Rs 47 and expanded money supply to help with liquidity. But mutual fund redemptions will follow the hedge funds, and more money will trickle out before the end of the year, meanwhile lower borrowing rates from the government and decreased CRRs haven't made much of a dent in the commercial paper market. Still, one hopes its relative insularity will provide India the soft landing it deserves.
This photo is taken looking west into the Arabian Sea in Juhu, Mumbai.
