Rupee rose and stocks soared last Thursday after India's central bank chief unveiled new measures to support the pendulum ailing currency and open markets , providing shooting terrified investor confidence in the country 's most serious economic crisis in the twenty- years.
Rupee rose up 2.3% to 65.53% U.S. dollars, well off a record low of 68.85 hit on Aug. 28 .
NSE 's main stock index rose 3.3 percent NSEI , driven by the lenders such as HDFC Bank HDBK surged after the new measures include increasing foreign bank lending restrictions.
However, in an over-excited Reserve Bank of India (RBI) governor Raghuram Rajan strong debut Wednesday , economists warned that he can not resolve through their own challenges in the economy is facing a sharp slowdown in growth , and a record high current account deficit , which has driven 16 rupees % decline so far this year .
Government's failure to push through political reforms need to address the difficult economy, but may increase next year 's election populist spending expensive prospect could threaten the country's sovereign credit rating, which is one notch above junk status .
"In a certain extent , the recent rupee tumbling and instability in the financial markets , has been a crisis of confidence this end , provided the new governor to maintain communication and stress acting in a predictable path would be a welcome move," Radhika Rao , in Singapore, DBS Bank economist , said in an e-mail to the customer.
"Nevertheless, a weak rupee will continue to dominate the external driving force momentum , and the urgent need to address the structural weaknesses of the country - fiscal and current account deficits , as well as to revive investment activities ."
At least on Thursday , the Indian market reflects unexpectedly launched his first day at the helm of the central bank in a burst of recommended IMF former chief economist Raghuram Rajan on optimistic.
Rs propped in action , these measures include the exporters and importers to provide more flexibility to hedge their currency forward contracts , trading companies have been complaining about regulations, leaving them unable to respond quickly to rapid exchange rate movements.
"The statement is impressive required reading , in our view," Deutsche Bank (Deutsche Bank) said in a report .
"India is a myriad of cyclical and structural barriers will continue to keep the back of the economy at that time , the risk of a deeper crisis is not trivial , but ( Wednesday ) statement displays from a new monetary and financial sector policies and cohesion of a fresh vision appointed central bank governor can shine a much needed light on India's prospects and potential . "
India's defense rupees so far rely RBI , including drain cash from the market , raising short-term interest rates and capital controls on residents Indians controversial steps taken .
Investors have said little faith , the government can push through major reforms , such as subsidized fuel prices, which may help to revive confidence in the economy .
Asia's third- largest economy is suffering from a lack of investment in manufacturing and services slowed sharply .



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