The increasing outflows from Indian stocks and bonds propelled Rupee to jump high since November 2015. The selloff in China also resulted in further withdrawal by foreign investors in Indian markets. The Indian currency reserves were also declined during the period. There was heavy withdrawal by foreign investors in Indian stocks since 14 January 2016. 

The net outflow in January so far was at $686.2 million following a selloff in Chinese markets. The foreign holdings of rupee-denominated debt dropped INR 7.5 billion ($111 million) during the last week, according to the data from National Securities Depository Ltd.

According to a report by Bloomberg, India was suffering from the drop in currency reserves during the two weeks. The Reserve Bank of India (RBI) has been intervening in the foreign exchange (forex) market in support of Rupee from 2015 into 2016. The implied volatility for the three months rose 15 basis points to 7.50. 

However, the Rupee is expected to perform better against the UK's British Pound as India is outshining emerging markets. The British Pound couldn't rise against Rupee on Monday (18 January) despite the widening of Indian trade deficit to INR11.66 billion in December from 9.78 billion in November 2015. 

India is one of the emerging markets and weathering the ongoing commodity crisis as the economy is diversified, as reported by PoundSterling Live. India surpassed China as the fastest growing economy during the first quarter of 2015 as its GDP growth rate at seven percent. 

The implied volatility gauge is used in pricing options. The volatility rose to 7.5850 indicating the highest level since 12 November 2015. The Indian currency Rupee in Spot market eased 0.1 percent to 67.68 against the US dollar, according to the data from Bloomberg. 

Gaurav Sharma, a senior currency analyst at Religare Commodities Ltd. in Noida, near New Delhi, said: "The rupee is likely to depreciate further before stabilizing. The global equity selloff has raised concern about capital flows."

Indian rupee was trading at 18.49 against the UAE dirham. The life-time low of 18.55 per UAE dirham recorded two years ago, according to Emirates 24-7. Rupee against the US dollar fell to INR67.91 per dollar. The Indian currency may also breach INR74 against the US dollar this year and this will translate into INR20 against the UAE dirham. 

The yield on benchmark sovereign notes due May 2025 was marginally changed at 7.81 percent. The Indian markets benchmark S&P BSE Sensex fell 1.1 percent registering the total loss of 7.4 percent in 2016 so far. Indicating the sharp decline since September 2015, the Indian currency stockpile fell $2.8 billion to $326.4 billion.