In spite of the Reserve Bank of India’s best efforts, the Rupee is still leading the pack of weakening Asian currencies this week. With positive US economic data upping the odds of the Federal Reserve tapering stimulus in September, emerging-market currencies like the Rupee are struggling.
The US Dollar to Indian Rupee Exchange Rate was in the region of 61.0250 as of 10:40 GMT
Although the central bank has taken steps to bolster the flagging asset, after it intimated that the actions taken last month would be in place for a limited time the Rupee’s descent against the US Dollar continued.
Over the last week the Rupee has tumbled by 2.6 per cent against the US Dollar, the worst drop of any Asian currency.
As a collective, Asian currencies are in line to record their worst five-day performance in over a month.
The USD/INR exchange rate hit a high of 61.0300
While the Rupee enjoyed a modest rebound before the RBI rate decision, the currency is back to within touching distance of record lows.
There are concerns that the RBI is facing a real quandary, with low growth restraining the action they can take and the desire to ease policy warring with the need for tighter liquidity because of the weak Rupee.
If today’s US employment figures reveal a decline in the nation’s jobless rate as expected, it will further fuel the fire of speculation surrounding the Fed reining in quantitative easing.
Although the Fed has stated that the current level of bond buying will be maintained for the present, if US data continues to show economic improvement the central bank will find it hard to justify not issuing a reduction.
As analyst D.J. Park observes: ‘Investors are paying more attention to the US economic data than the Fed’s words. Because the data has been better than expected, the tapering concerns are back.’
The Rupee also softened against the Pound as the British currency was supported by impressive domestic construction data.
Current Rupee (INR) Exchange Rates:
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The Pound Sterling/ Indian Rupee Exchange Rate is currently in the region of: 92.4455 >
The Euro/Indian Rupee Exchange Rate is currently in the region of: 80.5531 >
The US Dollar/Indian Rupee Exchange Rate is currently in the region of: 61.0250 >
The Australian Dollar/Indian Rupee Exchange Rate is currently in the region of: 54.2312 >
The New Zealand Dollar/Indian Rupee Exchange Rate is currently in the region of: 47.8823 >
The Canadian Dollar/Indian Rupee Exchange Rate is currently in the region of: 58.6142 >
(Correct as of 10:40 GMT)
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