A lot has happened since our last letter in July. US Fed apparently sent a “clear” signal to the market that its going to taper its $85 bln/mo asset purchase program. Sensex dropped 2000+ points. Indian Rupee sold off 13%. India’s fledgling bond market saw massive outflows. A run on India’s foreign reserves looked imminent. Sell side research started predicting USDINR at 70, then 80, even 100 by the end of the year. RBI allegedly intervened multiple times in the currency markets but to no avail. Economists and main-stream media invoked the 1991 BOP crisis and openly started asking the government about an IMF bail out. It was India’s Lehman Moment.
Notes & Letters
A collection of our thoughts, views, and excerpts from our investor letters.