Rupee Ends At New Record Low, Within Striking Distance Of 82 Per Dollar

The rupee collapsed to a new record closing low, after hitting its weakest level earlier in the session on Wednesday, driven by a soaring dollar to fresh two-decade highs as major central banks worldwide hike interest rates to fight a surging inflation, which investors perceive would driven their economies into a recession..Bloomberg quoted the rupee at 81.9300 per dollar, after it collapsed to its weakest level of 81.9500 during the session, compared to its previous close of 81.5788 against the greenback..PTI reported that the domestic currency plunged 40 paise to close provisionally at a new all-time low of 81.93 against the US dollar. .The White House downplayed the possibility of weakening the dollar, which sent the dollar surging to another record. Meanwhile, the ongoing global bond crisis sent 10-year Treasury rates to their highest level since 2008..The dollar's rally brought losses to other currencies, including the euro and the onshore yuan..“The fact we have such a strong increase in US yields is attracting flows into the US dollar,” Nanette Hechler-Fayd'herbe, Chief Investment Officer of International Wealth Management for Credit Suisse Group AG, told Bloomberg “As long as monetary and fiscal policy worldwide are really not coming to strengthen their own currencies, we should be anticipating a very strong dollar.”.Apart from rising borrowing costs and the resultant economic slowdown, the British government's so-called "mini-budget," released last week, which announced a slew of tax cuts with little explanation of how they would be paid for, was at the centre of the most recent sell-off on international markets..Ray Dalio, the founder of Bridgewater Associates, one of the world's largest hedge funds, told Reuters that the British government's plan to sell billions more in UK debt to fund its tax cuts was the icing on the cake.."The panic selling you are now seeing that is leading to the plunge of UK bonds, currency, and financial assets is due to the recognition that the big supply of debt that will have to be sold by the government is much too much for the demand," Mr Dalio tweeted on Tuesday.."That makes people want to get out of the debt and currency. I can't understand how those who were behind this move didn't understand that. It suggests incompetence. Mechanistically, the UK government is operating like the government of an emerging country," he said..Although still above Monday's record low of $1.0327, the value of the pound dropped by 0.6 per cent to $1.0675, setting up for its largest monthly decline since the Brexit vote in June 2016..The euro dropped for a sixth day in a row, falling 0.4 per cent to $0.95505, just missing the 20-year low set last week of $0.9528.."Resistance (to dollar strength) is futile," ING analysts headlined a morning note, Reuters reported.."Whether it be US data surprising on the upside, the US Administration showing no concern at all with the strong dollar, or new chapters in the energy war in Europe, it looks like all systems are go for the dollar rally. Trying to pick a dollar top in the current climate is an exercise in futility," added ING analysts.

Rupee Ends At New Record Low, Within Striking Distance Of 82 Per Dollar

NDTV Profit

NDTV Profit

Follow Us

DISCOVER US FASTER

DOWNLOAD THE APP