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I recently covered my short position in the India Fund (IFN) as I thought, from a "Trade" perspective, after seeing a -19% two month swan dive in India's market, that it was finally oversold.

Today, India did what they needed to do, chasing down the inflation run rate, by raising interest rates by another 50 basis points to 8.5%.

At +11% year over year, inflation is running at least 300 basis points over India's slowing economic growth rate. This proactive move by India's central bank should, at the very least, stop the hemorrhaging that they continue to see in the value of their local Rupee currency.

Stocks are discounting mechanism of future news. Now that inflation readings and the appropriate rate hikes are yesterdays news, it's less obvious for me to be running aggressively net short India.
KM