It seems that every week the Rupee is hitting a fresh record low against its American currency rival, and this week is no exception.
The US Dollar to Indian Rupee Exchange Rate was in the region of 62.7600 as of 10:35 GMT
In spite of all the steps taken by the Reserve Bank of India in an effort to restrain the Rupee’s persistent weakness, ongoing speculation regarding the US Federal Reserve and the tapering of stimulus continues to negatively impact the emerging-market asset.
With foreign investors retracting funds from India amid domestic growth fears, the RBI’s introduction of cash restrictions and an interest rate increase have done little to impede the Rupee’s decline.
The US Dollar to Rupee (USD/INR) exchange rate hit a high of 62.8200
After plummeting by 1.3 per cent the Rupee lurched to a historic low of 62.4600 against the US Dollar.
In response to the Rupee’s movement, foreign exchange expert Ashtosh Raina observed: ‘The Rupee is reacting to the strength of the Dollar globally and I think the weakness in the local currency will persist. None of the efforts by the government and the central bank seem to be having any impact.’
Over the past three months the Rupee has fallen by almost 16 per cent against the US Dollar.
As the US economy gathers momentum, increasing the odds of the Fed tapering stimulus, growth in India has been less than impressive.
In the 2012-13 financial year the Indian economy expanded at an annual pace of 5 per cent, its slowest rate for a decade.
Over the weekend India’s Prime Minister Manmohan Singh attempted to dispel fears that India is on the precipice of a financial crisis comparable to that seen in 1991. He argued; ‘there is no comparison. And no question of going back to [the] 1991 crisis’.
However, despite Singh’s words confidence remains low and the Rupee continues to flounder.
As well as weakening to record lows against the US Dollar, the Rupee is softer against a bullish Pound Sterling and Euro.
This week there is little in the way of domestic news to look out for, but additional positive data from the US could inspire Rupee movement.
The publication of minutes from the latest Federal Open Market Committee policy meeting will also be of particular interest.
Current Rupee (INR) Exchange Rates:
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The Pound Sterling/ Indian Rupee Exchange Rate is currently in the region of: 98.1880 >
The Euro/Indian Rupee Exchange Rate is currently in the region of: 83.6465 >
The US Dollar/Indian Rupee Exchange Rate is currently in the region of: 62.7600 >
The Australian Dollar/Indian Rupee Exchange Rate is currently in the region of: 57.6786 >
The New Zealand Dollar/Indian Rupee Exchange Rate is currently in the region of: 51.1005 >
The Canadian Dollar/Indian Rupee Exchange Rate is currently in the region of: 60.7731>
(Correct as of 10:35 GMT)
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