The Indian Rupee slumped to a record low as investors choose the US Dollar as speculation continues to mount that US policy makers will soon begin to reign in their asset purchasing programme.
The Rupee has fallen to its weakest level in a month after data showed that American employers hired up to 175,000 workers in May, a figure that beat economist expectations of a rise of 163,000. The increased demand for the US Dollar as result now leaves the Rupee vulnerable to widening current-account deficit.
The currency fell to 57.7637, surpassing the previous record low of 57.3275 set in June 2012.
“We seem to be set for a weakening rupee all this week,” said Nick Verdi, a strategist at Barclays Plc in Singapore “One reason is the strengthening Dollar and the other is India’s fundamentals.”
The rapid fall of the Rupee in recent days is being blamed on a panic in the markets as a result of the Dollar’s surge. Economists are expecting the Rupee throughout the course of the week.
“I think this is panic in the market, which is unwarranted because it started with the misinterpretation of what the Federal Reserve chairman had spoken of in terms of quantitative easing,” Mayaram said in New Delhi today. “They have now more than clarified that this is not imminent,” he said, adding “so this will settle down in a while.”
Despite the record fall some economists are predicting that the Rupee will make a substantial improvement in the second half of the year.
“We see the fundamentals for the Rupee improving substantially in the second half of the year, the move today doesn’t change that outlook,” says Deutsche Bank’s chief economist Taimur Baig.
Current Rupee (INR) Exchange Rates
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The Pound Sterling/ Indian Rupee Exchange Rate is currently in the region of: 89.5079<
The Euro/Indian Rupee Exchange Rate is currently in the region of: 76.2072 >
The US Dollar/Indian Rupee Exchange Rate is currently in the region of: 57.7150 >
The Australian Dollar/Indian Rupee Exchange Rate is currently in the region of: 54.3715>
The New Zealand Dollar/Indian Rupee Exchange Rate is currently in the region of: 45.3909 >
The Canadian Dollar/Indian Rupee Exchange Rare is currently in the region of: 56.5798>
(Correct as of 10:30 am GMT)
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