| The rupee on Tuesday touched an all-time low of 52.73 to the dollar, and speculation is rife that it could slide further for two reasons. Given the strong demand for the dollar globally (because of the turmoil in the eurozone), the greenback is expected to climb further vis-a-vis most other currencies. Specifically to India, foreign institutional investors are in no hurry to invest in our equity market due to a combination of domestic and global concerns.
Thankfully, FIIs have not sold shares aggressively despite the weakness in both the rupee as well as equities. But should the rupee slide further for whatever reason, it could trigger a vicious circle wherein FIIs would start pulling out money from shares, which in turn would weaken the rupee, and in turn spark more selling from other foreign investors...............................................Full Article: Source
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