Indian rupee touches record low versus the US dollar
Mumbai: The Indian rupee fell to near record lows against the dollar on Wednesday, forcing the central bank to intervene to stem further falls on a tough day for Asian currencies.
Indian rupee seems to be in free fall at the moment. On Wednesday afternoon there Indian Rupee was trading at Rs 68.48 versus US dollar in the market. This is the lowest that the Rupee has reached in several years now.
If you thought that the Rupee has touched its lowest point and that it will not fall any further you are certainly wrong.
Traders are of the opinion that they expect the rupee to soon test the record low, with one-month non-deliverable forwards already trading at 69. Many others suggest the Indian currency breaching the 70 mark pretty soon.
In the meantime the Indian rupee fell to near record lows against the dollar on Wednesday, forcing the central bank to intervene to stem further falls on a tough day for Asian currencies. The rupee fell to as low as 68.67 to the dollar, not far from a record low of 68.85 hit in August 2013 when India was struggling with its worst financial turmoil since the 1991 balance of payment crisis.
The fall seems to be rather systematic. It was trading at 68.6100/6150 as of 0605 GMT, down nearly 0.4 percent from Tuesdayâ€™s close of 68.3725/68.3825 and taking its losses so far this year to around 3.6 percent. In 2013 global markets were hit by fears of a â€œFed taperâ€ as the U.S. central bank sought to reduce its massive policy easing. This time around the rupee is also responding to a worsening global environment, including uncertainty about low oil prices and continued worries about Chinaâ€™s economy.
There are reports that given the free falling rupee, the RBI sold dollars via state-run banks to prevent further falls, traders said. RBI Governor Raghuram Rajan in September said India would be â€œan island of relative calm in an ocean of turmoilâ€ and has touted the countryâ€™s lower inflation and higher growth than other economies. Rajan has indicated the RBI will step in to ease volatility in the rupee but would not manage exchange rates.