JAKARTA (TheInsiderStories) – Followed the resignation of governor Reserves Bank of India (RSI), Urjit R. Patel on Dec. 10, Rupee slumped one-month low level to 72.42 compared to US dollar today. Analysts rated his resignation could make investors more wary of India and hurt the economy.

Yesterday, the Rupee closed at 71.34 compared to the greenback. The trading pattern in the foreign exchange market was impacted by massive sell-offs in domestic equities as investors panicked over exit polls suggesting the Congress giving a tough fight to the ruling party in 2019 election.

The RSI’ governor resigned from his position after a prolonged public spat over policy with the government under prime minister Narendra Modi. In his short statement Patel stated, “On account of personal reasons, I have decided to step down from my current position effective immediately.”

Patel’ sudden exit also kept investors on the edge with bout of monetary policy uncertainty amid the election time in several region. Today, the Sensex was trading at 34,970.05, up 10.33 points, or 0.03 percent, and the Nifty 50 was at 10,490.25, up 1.80 points, or 0.02 percent.

The 10-year government bond yield erased all the gains and was trading flat at 7.587 percent, move in opposite directions with Rupee movement.

Previously Moody’s Investors Service saying India and Indonesia are among Asia’s worst-hit Asian currencies this year. It’s no surprise that India and Indonesia are among the worst-hit Asian currencies this year when we look at their foreign debt exposure and the level of reserves they have to cover that.

Moody’s  external vulnerability index – puts Indonesia at 51 percent and India at 74 percent. External vulnerability index is the ratio of short-term debt, maturing long-term debt and non-resident deposits over a year calculated as a proportion of reserves.

Email: linda.silaen@theinsiderstories.com