The rupee is back in the limelight and has in a way become more important than the stock market as the latter is being driven by the former of late.
The 70-mark has been breached which is more psychological in impact than real as it is likely that when the storm passes, the exchange rate will revert to the 69-level.
But the fact that it is over 70 can unnerve the market.
The rupee has been volatile for quite some time now but the sense one gets is that this time it is different.
During this year, there have been different phases of the rupee fall with each one feeding into the other.
To begin with, it was the Fed which took action on interest rates and indicated that there would be several more hikes during the year.
This was a shock of an economic nature which took the rupee down.
The second was the oil issue which hinged on the OPEC action and as the price went towards $80 a barrel, the rupee tumbled once more and here the fundamentals caused the downfall.
Third, was the issue of Iran where sanctions came in which was a combination of both fundamentals and sentiment as oil got pressured as also the expectations that the world economy could get impacted.
The fourth was the US decision to start shooting all those who indulge in unfair trade practices starting with China and the EU too, not spared.
‘Make America great’ meant that trade had to be fair with the US setting the definitions.
This caused the rupee to falter again and India too could get targeted was the market view.