Economy

Indian rupee hits all-time low against U.S. dollar

Indian rupee hits all-time low against U.S. dollar

The Indian currency weakened to 68.9100 per USA dollar Thursday, past its previous record of 68.8650 reached in November 2016.

Wider current account deficit: Oil is not the only imported commodity that will be impacted by a weakening rupee.

"The RBI has been effectively managing (the rupee) over the years, and they do have ample firepower to manage sharp falls".

Mad rush for dollar was witnessed as importers see further erosion in the rupee value even as it was a field day for speculative traders before the RBI came in strongly, pumping million into the market to salvage the rupee. The stronger dollar and expectations of higher U.S. interest rates were also major factors in the rupee's fall.

India's assets are caught in a vicious downward spiral, where capital outflows hurt the currency, which then further deter investments.

India is the world's fastest-growing large economy in recent quarters, but the continued climb of oil prices could change that, so many investors are lowering their exposure to its currency.

PE and FII exits to suffer: Private equity players and foreign equity investors looking to score handsome exits could feel the heat as the effective dollar-denominated returns on their investments may go down with the rupee's depreciation.

This would mean a hit on the country's current account deficit.

Highly volatile local equities in the midst of option expiry along with overwhelmingly bullish dollar versus major currencies also weighed on the trading front.

More news: 17 states sue Trump over separation policy

The rupee has just hit a new all-time low.

India is a massive importer of oil, securing more than two-thirds of its needs from overseas.

The worldwide oil benchmark Brent surged to $77.33 per barrel on Thursday.

Oil prices have been rallying for much of 2018 on tightening market conditions due to record demand and voluntary supply cuts led by the Middle East-dominated producer cartel of the Organization of the Petroleum Exporting Countries (OPEC).

The Reserve Bank of India (RBI) estimated in its monetary policy report in April that for every 5% fall in rupee, retail inflation will increase by 20 basis points.

The US Federal Reserve was the first to initiate this process by scaling down its QE (quantitative easing) programme and starting to increase interest rates in the US. However, the settlement takes place in dollars with the rupee rates in India used as a reference.

The local unit, however staged a rebound against the pound sterling to end at 90.05 per pound from 90.45.

The rupee's fall, however, is expected to help exporters, though currency moves in other trading partners will also have an impact, especially with the Chinese yuan in retreat. The rupee has shed 7.7 per cent this year, making it the worst performing currency in Asia, followed closely by the Philippine peso.

"For as long as buying the dollar continues to be the trend of the [currency] market, there is very little emerging markets can do to prevent weakness", added Ahmad.


  • Trump Will Finally Meet With Putin Next Month. That Should Terrify You

    Trump Will Finally Meet With Putin Next Month. That Should Terrify You

    Late past year , the USA president said he believed Putin's in-person denial of Russian involvement when the pair met. Helsinki has been the traditional location of talks between the United States and Russian Federation .
    Supreme Court ruling shows travel ban isn't extreme

    Supreme Court ruling shows travel ban isn't extreme

    I have reason to suspect that the press isn't exactly thrilled over the Supreme Court upholding President Trump's travel ban. However, Tuesday's majority decision, authored by Chief Justice John Roberts , said "The text says nothing about religion".
    Japan advances on fair play points despite loss to Poland

    Japan advances on fair play points despite loss to Poland

    Japan were creating opportunities on set-plays for most of the half, but the Poles' aerial strength was too much for the Japanese. Neither Japan nor Poland made an effort to win the match after hearing about Mina's goal over in Samara.
  • Halo TV series is coming to Showtime

    Halo TV series is coming to Showtime

    Rupert Wyatt , who directed "The Rise of the Planet of the Apes ", will direct multiple episodes. Killen created the short-lived 2012 NBC drama, " Awake ", which starred Jason Isaacs.
    Mom warns about dangers of playgrounds after daughter breaks leg on slide

    Mom warns about dangers of playgrounds after daughter breaks leg on slide

    Meadow is now 3 and has made a full recovery since that frightening day at Heckscher Park in Huntington, New York, in 2015. Heather adds that for similar reasons "it's [also] unsafe for children to ride with other children or older siblings".
    Amazon buys prescription delivery startup PillPack

    Amazon buys prescription delivery startup PillPack

    The startup has raised north of $120 million in funding from big-name backers that include TechStars, Menlo Ventures, and Accel. PillPack is an online pharmacy which operates in all 50 U.S. states and offers pre-sorted dose packaging and home delivery.
  • Rep. Jayapal arrested at Washington D.C. immigration protest

    Kirsten Gillibrand also appeared at the demonstration, calling it "an incredible protest of women speaking out to be heard". Immigration and Customs Enforcement agency, and were heard chanting "abolish ICE".
    Joe Crowley defeated by Alexandria Ocasio-Cortez in stunning upset

    Joe Crowley defeated by Alexandria Ocasio-Cortez in stunning upset

    The 28-year-old first-time candidate toppled a US House speaker-in-waiting twice her age in New York's primary election. Her plans for the House seat, which she is heavily favored to win in November, don't stop at progressive legislation.
    Spain Approaching Morocco With 'eyes Open'

    Spain Approaching Morocco With 'eyes Open'

    Russian Federation scored eight times in its first two matches before falling to a 3-0 defeat to Uruguay earlier Monday. Spain twice comes back to draw the match against an inspired Morocco performance.
  • The Queen Cancels Royal Appearance After Falling Ill

    But royal duties aside, the queen is 92 years old, and her social dance card would no doubt leave a 25-year-old exhausted. She was treated as a day patient and did not cancel any engagements nor appearances, but was spotted wearing sunglasses.

    Korea Knocks out Germany in 2-0 Upset

    Goalkeeper Cho Hyun-woo managed to keep Germany scoreless, stopping several threatening shots from German footballers. The Germany keeper bobbled the ball and needed to swipe the rebound away from the attackers after a spectacular dive.
    Online sales tax ruling could add $150 million to Minnesota’s coffers

    Online sales tax ruling could add $150 million to Minnesota’s coffers

    Allowing some online retailers off the hook in collecting sales taxes put small local businesses at a disadvantage, Kadoun said. Ten states require out-of-state sellers to notify buyers and inform states of the unpaid sales taxes.