Indian Prime Minister Narendra Modi is striking a middle path foreign policy. Photo: AFP / Prakash Singh

Though drops in the Japanese yen and Chinese yuan are getting the global headlines, the all-time lows set by the Indian rupee may be the most troubling currency stumble of them all.

The rupee recently breached 77 to the dollar for the first time amid five consecutive months of decline as surging inflation sends foreign institutional investors fleeing. The already relentless selling is intensifying as punters worry Reserve Bank of India (RBI) is losing control of the bond market.

The nation’s sovereign 10-year bond yields are topping 7.5% for the first time in three years as traders bet another RBI rate hike is on the way. Last month, the central bank surprised markets with an out-of-turn tightening move. So far in 2022, debt yields have shot up more than 100 basis points, unnerving stock valuations along the way.

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