00:00I'm Ruth Carson and this is what's important in FXN rates markets right now. We're going to talk
00:06about the Indian rupee, which has fallen against a dollar to an all-time low. It's weakened more
00:14than 5% this year, making it the worst performing Asian currency. The Indian rupee has been in a
00:21free fall over the past month, coming under pressure from delays in clinching a trade deal
00:25with the US and with foreigners pulling out money from the stock market. Indian importers
00:30as well have been looking to beef up their dollar holdings, hence exerting fresh pressure
00:35on the currency. The RBI has been stepping in every other day to ward off the weakness
00:41in the rupee by selling dollars. However, that comes at a cost. The country's foreign exchange
00:46reserves have fallen nearly $15 billion from this year's high of $702 billion, showing
00:53the cost of defending the currency. Still, not everybody is rattled with the rupee's
00:58undervaluation. India's fundamentals themselves will begin to get reflected in the currency
01:05once the financial market and direct investors begin to see the rupee undervalued levels as
01:14an attractive entry option. That is one point. So India's domestic fundamentals will have a
01:18large influence on the rupee recovering from its undervalued levels in the coming year.
01:23Back here in Singapore, home to the world's third largest FX trading hub, the rupee is being closely
01:30watched too. Some forecasters are predicting the rupee to slide to 91, 92 per dollar next year,
01:37and the health of the rupee matters. It reflects the health of India's economy,
01:42which is the third largest in the region. So definitely watch this space.
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