The rupee plunged 90 paise to close at an all-time low of 80.86 (provisional) against the US dollar on Thursday after the US Federal Reserve's interest rate hike and its hawkish stance weighed on investor sentiments. Forex traders said the US Fed's rate hike and escalation of geopolitical risk in Ukraine sapped risk appetite. Moreover, the strength of the American currency in the overseas market, a muted trend in domestic equities, risk-off mood and firm crude oil prices weighed on the rupee.
For the first time, the rupee declined to the low level of 80 against the US dollar in intra-day spot trading on Monday before ending the session 16 paise lower at 79.98 amid a surge in crude oil prices and unrelenting foreign fund outflows. At the interbank forex market, the local unit opened at 79.76 against the greenback but lost ground to touch the psychological low mark of 80 against the American currency. The local unit clawed back some lost ground and closed at 79.98, registering a fall of 16 paise over its previous close.
Unhedged exposure of the corporate poses a risk and overall percentage of hedging remains low.
The latest macro-data from India is disquieting
The rupee has depreciated 2.35 per cent in the past three months and one per cent in the past month, despite strong capital flows and falling oil prices.
The current account deficit widened to $10.1 billion or 2.1 per cent of GDP for the September quarter as against 1.2 per cent in the year-ago period.
The Reserve Bank of India (RBI) has liberalised the procedure for facilitating the import of rough diamonds (termed roughs in the trade).
A weak US dollar in overseas markets was the main reason for the rupee's rise even as losses in domestic stocks and some fag-end dollar demand from importers prevented further gains
Some banks might charge you a nominal amount of Rs 100-150 for issuing the card.
As the Indian currency hovers around its lowest versus the US greenback, several smaller and mid-sized companies are expected to face rough weather as almost 44 per cent of the foreign loans taken by Indian companies remained unhedged. According to the data sourced from the Reserve Bank of India, Indian companies raised around $38.2 billion in the financial year ended in March. Of this, only 56 per cent of the loans are hedged while the rest of the foreign loans remain unhedged, thus risking the companies to forex volatility.
Finance Minister Arun Jaitley on Friday tabled the pre-Budget Economic Survey in the Lok Sabha.
The government was also faced with problems on its balance of payments. It took steps to conserve declining foreign exchange reserves, and began to regulate the production, supply and distribution of gold. It banned forward trading in the yellow metal in November 1962, and introduced gold bonds as well, reveals the RBI's annual report for the year ending June 1963.
Indian rupee, which earlier this week touched an all-time low, is likely to remain under pressure and may test new levels as a fallout of the US Federal Reserve indicating more interest rate hikes, experts said. The aggressive rate hikes will dampen demand and increase the possibility of a recession in the US. This could accelerate the pace of capital outflows, weaken the rupee and raise the threat of imported inflation.
Sri Lanka on Tuesday deployed military personnel at State-run petrol pumps to monitor and manage fuel distribution amidst a shortage that led to serpentine queues of consumers outside filling stations.
The rupee depreciated 31 paise to an all-time low of 80.15 against the US dollar in early trade on Monday tracking the strength of the American currency and firm crude oil prices. At the interbank foreign exchange, the rupee opened at 80.10 against the dollar, then lost ground to quote at 80.15, registering a fall of 31 paise from the last close. On Friday, the rupee closed at 79.84 against the dollar.
The Congress released a booklet 'Nau saal, Nau sawaal', asking nine questions from Modi. The BJP rejected the Congress' criticism as a 'bundle of lies and mountain of deception' and said the questions are born out of 'pathological hatred' of the PM.
'There will always be a challenge to maintain a fine balance to ensure that the growth keeps happening and inflation is contained.'
Indian corporates might face higher borrowing cost in the overseas market in short-run due to the Greek debt crisis.
The central government and the Reserve Bank of India have devised a country-specific plan towards implementation of overseas trade in rupee, people aware of the matter said. To start with, a small number of banks will be allowed to manage cross-border transactions in domestic currency with a particular country. "Small countries that are dollar-deficient have shown interest in doing trade in rupee.
What do the fluctuating gold-silver price ratio portend?
The EU is likely to intensify sanctions if the situation remains tense.
Shares of most of the Adani group firms ended lower on Monday, with the group companies' combined mcap witnessing a sharp fall of Rs 9.5 lakh crore after US-based short-seller Hindenburg Research's adverse report.
Clamping down on the delays in repatriating foreign exchange earnings, the Reserve Bank of India (RBI) has tightened norms for special economic zones (SEZs), asking them to realise and bring back full value of goods and services to India within a year from the date of export.
She also took a swipe at the Bharatiya Janata Party over its defeat in the just-concluded Himachal Pradesh assembly elections, saying the ruling party's president could not hold on to his home state. "Who is the Pappu now?" she asked.
Ongoing trade-war rhetoric between the US and China added some nervousness on the trading front coupled with extremely bullish dollar sentiment overseas.
'You can put 25 per cent right now; put another 25 per cent when Nifty corrects another 500 points.' 'At 13,500 put another 25 per cent and at 13,000 one can get fully deployed.'
US brokerage Bank of America-Merrill Lynch on Tuesday said its sees the first rate cut this fiscal only in March next as inflation is expected to fall only by December end on a decline in commodity prices driven by the US Fed tapering.
RBI is expected to cut policy rates by 50 basis points by 2016.
NPA issues in the banking sector, standoffs in Parliament denting the reform momentum and limited space on the fiscal side are among the major concerns for investors.
Reddy has worked to reform the economy.
With Greeks' rejection of rescue package from creditors spooking markets, the government on Monday asserted that India is well insulated from the crisis but rupee may be affected due to the outward flight of investment.
The employment situation remains dire. Whatever can be done to promote greater low-skill employment should be pursued aggressively, advises former chief economic adviser Shankar Acharya.
The year 2015 may well turn out to be a watershed in global macroeconomic adjustment.
The dollar-rupee rate could move in the opposite direction if dollar policy rates rise and the FPIs sell in December, says Devangshu Datta.
The rouble has been falling steadily since early November and collapsed earlier this month following a spectacular decline in the price of crude oil to five-year lows.
The concessional swap windows have attracted about $25 billion, RBI deputy governor HR Khan said on Monday.
The rupee depreciated by 37 paise to close at 79.62 against the US dollar on Thursday despite sustained foreign capital inflows and a positive trend in equities. At the interbank foreign exchange market, the local currency opened at 79.22 and saw an intra-day high of 79.22 and a low of 79.94 against the American currency. It finally ended at 79.62, down 37 paise over its previous close of 79.25.
'Today, there is no easy money to be made after the run-up in equities.'
The Reserve Bank on Monday asked banks to put in place additional arrangements for export and import transactions in Indian rupees in view of increasing interest of the global trading community in the domestic currency. Before putting in place this mechanism, banks will require prior approval from the Foreign Exchange Department of the Reserve Bank of India (RBI), the central bank said in a circular. "In order to promote growth of global trade with emphasis on exports from India and to support the increasing interest of global trading community in INR, it has been decided to put in place an additional arrangement for invoicing, payment, and settlement of exports / imports in INR," it said.
India's forex reserves recently declined by $704 million to $354.517 billion.
© 2026 Rediff.com - Advertise with us - Disclaimer - Privacy Policy - Sitemap - Feedback - About us - Terms of use - Grievances