The Indian rupee recently hit a historic low against the US dollar, ranking at the bottom among Asian currencies this year. Interestingly, India's economic data is actually quite good, but it can't withstand the constant threat of US tariffs, which have completely dashed any expectations of preferential treatment.

Foreign capital has been exiting rather aggressively this time. Funds that previously bet on the Indian market are now continuing to withdraw. The Reserve Bank of India had been selling off foreign exchange reserves in an attempt to stabilize the situation, but now it seems to be running out of steam, with noticeably fewer intervention actions. In theory, rupee depreciation could make exports more competitive, but the real issue is that in the current environment of rising trade protectionism and heightened economic uncertainty, international capital confidence is key—and at the moment, that confidence is clearly lacking. The market is in the process of repricing emerging market risk exposure.