"If markets the world over are collapsing and the up downs of our stock markets have been completely determined by the net inflows of Foreign Institutional Investors. There are nearly 2000 FIIs and many of them are based in the USA. In 2007 these the FIIs pumped $18 billion into the Indian stock markets. We had a problem of plenty. We had so much money; we didn't knew what to do with it. But the same FIIs when the recession in the US hit them, started withdrawing. So in this year between January and October the same FIIs have withdrawn 3/4th of the amount of money that they pumped in last year. This is the main reason why you find that the dollar has become so strong, which might be paradoxical to some because the US economy is getting weaker and the International Monetary Fund says it is not going to grown in 2009, yet the dollar has become so strong. In June 2007 one US dollar could be bought for Rs 39. Today it is Rs 50 for the same dollar and that's because the FIIs when they withdraw money want it in dollars so the surge in demand for the dollar explains the exchange rate having gone so much weak," he says.

"It is bound to affect the sales all goods. I think the sectors likely to be affected more would be consumer durables sector. People would postpone purchases that they can. People won't stop purchasing food as that's something they need. Purchase of a flat, a car, a television set, a fridge etc could be postponed," he adds.