USDINR pair surged past the 63 levels on dollar buying by FII”s as investors pulled out money from emerging markets and other assets viewed as risky.
Indian indices fell more than 2 percent on Monday, registering their biggest single-day fall this year as the EM currency selloff is causing a contagion ef-fect. Nifty ended the day at 6135.9 levels, down by 130.9 points.
All eyes will be on RBI monetary policy wherein most likelihood, some of the recommendations announced last week would be formalized while it is ex-pected to maintain rates steady.
IMF has said that India is expected to grow at a lackluster pace of 5.4 percent in fiscal year 2014/2015, as a result of the weak investment cycle gripping the country.
Germany IFO - Business Climate improved to 110.6 in January from 109.5 in December whereas the IFO - Expectations was up to 108.9 from 107.4 in De-cember.
The IFO data are pointing towards Q1 economic growth of 0.5 percent in Germany even though the recent currency turmoil in emerging markets is not affecting balance books yet, but may act as a medium-term risk.