The Indian rupee depreciated 0.4 percent to 58.7150 per US dollar on Monday (26/05), the most in a month on speculation that India's central bank intervened to deliberately weaken the currency after it had gained 2.8 percent against the US dollar this month (becoming the best performing Asian currency). The rupee gained due to optimism about the new government's ability to boost the economy (which has slowed down considerably in recent years). However, the central bank expects that a too strong rupee will hurt the country's exports.
On Monday (26/05), Narendra Modi was sworn in as India’s new prime minister after his Bharatiya Janata Party won the national elections. Modi announced large economic reforms to boost the slowing economy, particularly through investments in the industrial sector and infrastructure. In 2008, India's economy still grew at an impressive rate of 9.8 percent. Last year, however, this had declined to 4.4 percent.