The Indian investment industry experienced an extremely volatile environment this week. The Indian currency ended at a flat Rs59.68 on Thursday after an unstable back and forth trading.
The announcement from the United States Federal Reserve regarding the continuation of its fiscal stimulus affected the Indian economy. Local oil companies also demanded more dollars than previous, adding to the volatility of the market.
Opening at a strong 59.39 against the dollar, the rupee shifted up and down between 59.38 and 60 during the Thursday trading.
When the Federal Open Market Committee announced that the fiscal stimulus plan showed no signs of implementation, the Indian unit strengthened against the dollar. The US$85 billion per month contraction by the United States Federal Reserve has been striking fear to investors not only in India, but around the world.
In response to the volatility, the Reserve Bank of India together with the Securities and Exchange Board of India created measures to curb the market's unpredictability.
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