Falling rupee begins to hurt dollar investors

While Sensex fell 14.4% since July 26, dollar investors lost 18.07%. The emerging weakness of the local currency against the greenback is beginning to hurt foreign investors. The rupee’s weakness has a cascading effect on equity returns of investors who buy stocks with their dollars. In the absence of full convertibility, foreign investors have to convert their dollars into rupees to buy stocks here and do the reverse while selling.

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