The Indian Rupee has stabilised for now after an extremely volatile August which saw the Indian currency test new all-time lows and lose about 20%+ against major global currencies. It has clawed back about 10% of the losses in September since Raghuram Rajan (dubbed "the Guv" by the Indian press) took office as the new Governor of the Central Bank. Also aiding the Indian currency has been the US Fed's surprise decision not to start, just yet, the much-dreaded (especially by emerging markets) taper of the economic stimulus. The Fed's balance sheet expanded from $ 1 trillion in 2008 to about $ 4 trillion currently as it pumped liquidity into the U.S. economy following the global financial crisis in 2008. Part of that money went to emerging markets searching for higher returns in fast growing economies. Interest rates in the US have remained around the 0.25% level for over three years now. Interest rates are not expected to go up in the U.S. until at least mid-2015, as the economy is still sluggish. For now, India has some breathing space. But the fear is that it will breed complacency among politicians that the crisis is over.

David Fuller's view The Rupee's firmer tone following its climactic acceleration (shown inversely against the US Dollar (weekly & daily) is certainly encouraging. India's stock market has remained volatile, albeit in a broad trading range (weekly & daily). If Narendra Modi wins next year's crucial election with a workable majority, India's stock market could take off.

(See also this comment on Mr Modi.)