Rupee hits record low against dollar

Jun 30, 2018, 09:02
Rupee hits record low against dollar

So far, Foreign Institutional Investors (FIIs) have pulled out Rs 469 billion from the Indian market (both equity and debt) causing the local unit to fall 8.24 percent this year from 63.84 to 69.10. This in turn has more than tripled the Current Account Deficit (CAD) from $15 billion in FY17 to $48 billion in FY18.

India's January-March current deficit widened to $13bn from $2.6bn a year earlier.

The rupee dropped to a record low against the U.S. dollar on Thursday, a slide fueled by fears over trade conflicts and higher oil prices that could drag down the major energy importer's economy.

Since Monday, the rupee has depreciated 1.2 per cent as consistent dollar demand from banks and importers, mainly oil refiners, following higher crude oil prices kept the rupee under pressure. In early trade, it strengthened further and was at 68.50 at 10.15 am, thanks to fresh selling of the American currency by banks and exporters.

The rupee on Wednesday closed at 68.61 against the USA dollar.

"But he added: "While they can exercise control on the domestic markets, they will have little or no control on the NDF (non-deliverable forward) markets, which has been setting the trend post our market close". Historically, we have gone to even higher levels. "Those who screamed murder when the rupee fell to 52 a dollar in times of Dr Manmohan Singh aren't to be heard also", tweeted the Mahila Congress.

"If we assess at any stage that we need to buttress or refurbish our reserves, the options are open", Garg said, adding "that situation has not arisen".

As per currency dealers speculations, the Indian rupee could hit 70 a dollar by the month of August as Reserve Bank of India (RBI) is not coming with initiatives to support the Indian currency.

Due to the drop in the value of rupee, there are concerns about the government's debt sales and the overall impact of the price rise of crude oil will have on the economy.

With crude oil prices screaming higher this week on the back of a big draw in USA inventories, supply disruptions in Canada and calls from the United States for its allies to stop importing Iranian crude as a part of new sanctions slapped on the country, it's clearly taken its toll on the rupee.

Modi had asked whose age the fall in the rupee reflected - the prime minister or the finance minister. Ahmad said that Indonesia's central bank may soon be forced to hike rates.