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On September 26 Financial site Bloomberg reported that because of risk aversion slowing capital inflows into appearing markets will hit India's rupee the most and China's yuan the least. This statement was made by Morgan Stanley.

A chief of currency strategy Stephen Jane at Global financial services firm Morgan Stanley located in London wrote in his report yesterday: “…international financial bustle will keep curbing investments and appearing economies will feel a material deceleration”. American legislators strictly refused a government motion to invest $700 billion into the state’s financial markets, being concerned about the rescue plan to solve a problem of the credit-market crisis will be detained.
In his detailed report Stephen Jane also wrote: ``The latest development programs in the American (U.S) financial markets may have further raised the current risk. As a matter of fact such a risk can cause a lot of troubles for the whole entire financial industry and obviously it will lead to a great amount of material expenditures.''
The latest victim of the financial crisis became Washington Mutual Inc. As a result Lehman Brothers Holdings Inc. was driven out of business that led to the hurriedly arranged rescues of Merrill Lynch & Co. and Bear Stearns Cos.

Interestingly among so-called BRIC countries China is able to make its currency stable in the financial crisis. China is currently the “…least confident on unsteady inflows. Despite this fact China has a big number of trade excesses, that’s why China’s currency (yuan) is quite stable in comparison with Indian’s rupee”, according to Jen’s article. As far as India is concerned this country is affected with “independent'” short-term inflows receiving the smallest amount of foreign direct investment, he pointed out.

Nowadays China's yuan is the most competitive performer among the 10 most-popular currencies on the territory of Asia outside Japan. Meanwhile India's rupee is suffering and being considered the worst performer following after the South Korean won.

Record Deficit

India has reported shortage in country’s trade account during each month since April 2002. The deficiency dramatically increased to a record amount of $10.8 billion in July. While China's trade surplus rose to a record $28.7 billion in August.

Above this Jen said in his note that “in the period between 2006 and 2007 foreign number of portfolio investments accounted for 70 % of the increase in total inflows into India.” According to information provided by the Securities and Exchange Board of India global funds bought $19.5 billion of Indian stocks and bonds in the past year and sold a net $6.7 billion in 2008.

This year China’s currency has gone up to 6.7 percent against the dollar. According to the China Foreign Exchange Trade System yuan traded at 6.8475 as of 3:10 p.m. per dollar in the city of Shanghai. However the rupee came down dramatically to 15.2 percent in 2008 and was at 46.49 per dollar.