The Indian Rupee fell to its lowest level in two-weeks against the US Dollar and made losses against a number of its most traded peers after data showed that inflation in India accelerated reducing the nation’s Central Banks ability to ease monetary policy.
According to official data prices of wholesale good jumped by 4.86% in June compared to the previous year, up from May’s figure of 4.7%. The data also showed that Price-increases had slowed in the four months through to May. Consumer price-inflation also quickened to 9.87% last month from 9.31%, while industrial output unexpectedly contracted in May.
The Rupee is expected to make further declines over the coming months according to Emirates NBD PJSC. Tim Fox the chief economist at the Emirates NBD said, “The Dollar-Rupee exchange rate is likely to remain underpinned in the short term in line with other emerging-market currencies. The increase in the inflation rate is something that the authorities may be sensitive to while the Rupee weakness remains.”
The currency ongoing weakness has begun to have its effects felt on the Indian populace with state run oil companies hiking the price of petrol for the fourth time in six weeks in a bid to counter the effects of the declining Rupee.
Crude oil used for domestic consumption is mostly imported and with the weak Rupee those imports become increasingly more expensive
The Rupee had hit a record low last week but has been steadied after the Indian Reserve Bank took action to try and stem its slide.
Further declines are expected on Thursday when Federal Reserve Governor Ben Bernanke hints at whether the US Central Bank will taper its monetary easing policy.
Current Rupee (INR) Exchange Rates
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The Pound Sterling/ Indian Rupee Exchange Rate is currently in the region of: 90.2847 >
The Euro/Indian Rupee Exchange Rate is currently in the region of: 78.1957 >
The US Dollar/Indian Rupee Exchange Rate is currently in the region of: 59.9247 >
The Australian Dollar/Indian Rupee Exchange Rate is currently in the region of: 54.5681 >
The New Zealand Dollar/Indian Rupee Exchange Rate is currently in the region of: 46.8210
(Correct as of 11:25 am GMT)
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