India's currency slumped one day after the abrupt resignation of the governor of the country's Central Bank. On Monday, Urjit Patel resigned from his post midway through his three-year term, citing "personal reasons". The rupee fell 1.2% against the US dollar and stocks also dropped as investors reacted to Patel’s departure.
His exit comes amid reports of a rift between the Reserve Bank of India (RBI) and the government.
Analysts expected Patel's resignation could make investors more wary of India and hurt the economy as it prepares for a general election next year. Priyanka Kishore, head of India and Southeast Asia economics at Oxford Economics, said Mr Patel's resignation was a "negative development for the market". Its timing has also raised some concerns about Central Bank independence in India.
"Patel's resignation seems like a protest at the government's interference," Ms Kishore said. "There are already other concerns weighing on the economy... uncertainty about RBI's leadership and policy at this point could weigh on growth further."
According to goodmenproject.com¸ the rupee has been among the worst performing currencies in Asia this year, hit by various factors including higher oil prices.