Search ForexCrunch

Analysts at TD Securities note that in a surprising decision yesterday the Indian government took control of IL&FS the shadow banking Infrastructure Company.

Key Quotes

“The government ousted the board of this “systemically important” lender. A new plan for IL&FS will be outlined by Oct 15. This could be good news but markets may see this as a sign of concern especially given worries that problems in shadow banking could spread.”

“Separately the INR looks particularly suceptible to the rise oil prices, with higher oil working against India’s efforts to reduce imports (Oil comprises 30% of India’s imports). INR is unsurprisingly the most highly (negatively) correlated currency with oil prices in the region.”