The Indian Rupee is close to hitting record lows against the US Dollar as risk weary investors choose the safer ‘Greenback’ over the Indian currency. Despite the recent belief that India was set to boom the reality has been very different in recent months.
The Indian economy has been beset with a sharp decline in growth, worsening public finances and increasing political turmoil, all factors that cause investors to seek better and safer options elsewhere. The so called ‘India story’ has faded as the shortfall in the nation’s current account ballooned to just fewer than 5% of GDP in the last financial year. Growth is a decade low level of just 5%.
“I don’t see anything that can turn the rupee around for a while,” Mitul Kotecha, Credit Agricole global foreign exchange strategy chief, said. “The currency is generally suffering from higher risk aversion which has sent people into US assets and a slew of domestic concerns like politics.”
The Rupee was Asia’s worst performing currency
The Rupee was Asia’s worst performing currency in May after it fell by 5%. On Tuesday the currency was trading in the region of 56.66 against the US Dollar, just less than a rupee above its all time low of 57.32 reached in June 2012.
Particularly worrying for India are the figures that show a 38% drop in foreign direct investment seen as long-term investment in infrastructure and other projects as overseas investors have given India a wide berth.
The Rupee could face “an unpleasant shock”, noted CLSA economist Rajeev Malik, adding that India “appeared to be ill-prepared” for a reversal in fund flows.
Current Rupee (INR) Exchange Rates
The Pound Sterling/ Indian Rupee Exchange Rate is currently in the region of: 86.8532
The Euro/Indian Rupee Exchange Rate is currently in the region of: 73.9126
The US Dollar/Indian Rupee Exchange Rate is currently in the region of: 56.5380
The Australian Dollar/Indian Rupee Exchange Rate is currently in the region of: 54.1521
The New Zealand Dollar/Indian Rupee Exchange Rate is currently in the region of: 45.2394
The Canadian Dollar/Indian Rupee Exchange Rare is currently in the region of: 54.6527
(Correct as of 11:25 am GMT)
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