Rupee Hits All-Time Low Against USD: 10 Things To Know
- The rupee nosedived to its life-time low of 69.62, tumbling by 79 paise against the US dollar in morning trade today in line with weakening domestic equities and global markets rout, reported news agency Press Trust of India (PTI). It regaining some ground to quote at 69.39 in late morning deals.
- Increased demand for the US currency from importers and banks amid fresh foreign fund outflows mainly hit the rupee sentiment, forex traders said.
- The Reserve Bank of India was seen intervening to stem a sharp fall in the rupee, news agency Reuters quoted two dealers as saying.
- Investors preferred safe-havens such as the US dollar and the yen after a plunge in the Turkish Lira sent all emerging market currencies sharply lower.
- Emerging market currencies have declined sharply as the Turkish lira has fallen to all-time low level after US president Donald Trump imposed sanctions and tariffs on Turkey, said Rushabh Maru - Research Analyst, Anand Rathi Share and Stock Brokers. "Market is nervous ahead of India's CPI (consumer price inflation) data due later today. The dollar has strengthened to multi-month high on expectations of aggressive interest rate hikes by the Federal Reserve in coming months as the US economy is experiencing strong growth momentum. Hence, due to all these factors, the rupee has declined to all-time low level today," he told NDTV.
- Investors preferred safe-havens such as the US dollar and the yen after a plunge in the Turkish Lira sent all emerging market currencies sharply lower. The lira has fallen about 45 per cent against the greenback this year on worries over Turkish President Tayyip Erdogan's increasing control of the economy and a deepening diplomatic rift with the United States.
- "There is no point spending a lot of dollars in defending a rupee when the force of the fall is so strong across emerging markets," Reuters quoted a senior forex dealer at a state-run bank, as saying.
- A recent Reuters poll of about 40 foreign exchange analysts showed that the rupee is now expected to trade at 68.22 per dollar in a year.
- "India has not been unscathed from the ongoing global trade tensions. China may have grabbed the bulk of the spotlight in terms of headlines, but the US is also reviewing its trade relationship with India," said Gajan Mahadevan, FX strategist at Lloyds Bank, in the Reuters report.
- The widening current account deficit, due to higher global crude oil prices and steady capital outflows, has also weighed on the rupee. (With agencies inputs)
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