Chief Economic Adviser, Arvind Subramanian said the country needed to be alert.
Advertisement
The yuan devaluation won’t affect India much as its economy isn’t as dependent on exports as China’s, Mr Damani said. In an interview to Now, Nick Parsons of National Australia bank said, ” Yuan devaluation will worsen background for Asian currencies”. The Shanghai Composite was 0.2% lower.
China’s currency has fallen further following a surprise change in its exchange rate mechanism that rattled global markets and threatens to fan trade tensions with Europe and the United States.
The Indian rupee fell sharply on Wednesday to touch its lowest level against the US dollar since September 2013, as China’s move to devalue the yuan sparked fears of a global currency war. Dollar index, which tracks the movement of the greenback against a trade-weighted basket of six major world currencies, declined 0.20 per cen to 97.12.
India runs a $42 billion trade deficit with China, data compiled by Bloomberg show.
On Wednesday, the yuan dropped another 1.6%.
Vedanta Ltd, the nation’s biggest copper produce, plunged 7.9 per cent to its lowest level since April 2009, and Hindalco Industries Ltd., an aluminum producer, tumbled 7.1 per cent to a two-year low. RUPEE IN ISLAMABAD AND RAWALPINDI: The dollar remained firm against the rupee at the open currency markets of Islamabad and Rawalpindi here on Saturday.
Advertisement
According to the information provided by the sources, the RBI was not spotted supporting the currency. It ended at a one-month low on Monday amid speculation the slide in oil will help slow consumer-price gains from June’s nine-month high.
