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Indian rupee touches all time low against US dollar

Thursday June 28, 2018 11:02 PM, Agencies

Rupee vs US Dollar

New Delhi: Indian rupee on Thursday touched an all-time low while crossing rupees 69 per US dollar mark due to what the analysts said high crude oil prices, weak macro-economic fundamentals, and because of heavy month-end demand for the American currency from importers and banks.

The domestic unit plunged to a record low at 69.10 before gaining ground to 68.95 at 1030 hrs, still down by 34 paise. The Indian unit resumed sharply lower at 68.89 from yesterday's closing level of 68.61 at the inter-bank foreign exchange here, according to PTI.

The dollar's sharp gain overnight coupled with falls in Asian peers caused the drop in early trade, traders said, adding they were hopeful the central bank would step in to prevent further losses.

The dollar was, however, steady against its peers on Thursday, having failed to extend overnight gains amid conflicting signals from Washington on a proposal to restrict Chinese investment as the bitter US-China trade row kept financial markets on edge, according to Reuters.

On the domestic front, a widening current account deficit (CAD) due to higher global crude oil prices and steady capital outflows have weighed on the rupee this year.

"Weakening at this pace shatters confidence. Markets expect RBI (Reserve bank of India) to manage the currency more effectively. The pressure on INR is high, thus in the absence of major action from regulators, 70 levels can be seen," the head of currency and debt trading at a foreign bank said. "The RBI has been effectively managing (the rupee) over the years, and they do have ample firepower to manage sharp falls."

The Congress party was quick to use the opportunity to critisize Prime Minister Narendra Modi by reminding him his old attacks against the then prime minister, Manmohan Singh, every time the value of rupee depreciated.

Leading the attack was the party’s chief spokesperson, Randeep Surjewala, who tweeted mockingly, “You mocked Dr. Manmohan Singh comparing his age to the value of depreciating rupee, which never really fructified. Now, rupee is at a historic low of 68.61 to 1$, surpassing your age. When will it be restored to rupees 45 to 1$ as you promised?" he wrote on Twitter.

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