India's currency falls to all-time low against USA dollar

Adjust Comment Print

The Indian rupee slumped to a new all-time low of 74.23 against the USA dollar, weakening from around the 73.65 ahead of the RBI policy statement.

Mr Khoon Goh, head of Asia research at ANZ Banking Group in Singapore, said the mix of strong U.S. data and the Fed chair's comments bumped up the dollar and USA bond yields, putting downward pressure on Asian currencies.

Traders remained cautious ahead of the Reserve Bank of India's policy meet scheduled later this week.

"Indian rupee plunged to a fresh record low of 73.77 against the stronger US dollar during the early morning trade", a market analyst said. Indian bond yields spiked as prices fell.

"There could be an upward revision in the inflationary projections for the year on account of higher oil prices, increase in MSPs and imported inflation (on back of rupee depreciation)", CARE Ratings said in a research note.

White House defends Trump after he mocks Kavanaugh sex assault accuser
Opposition among Americans to Kavanaugh has increased since last week's hearing, Reuters/Ipsos polling data showed on Wednesday. Amid McConnell's remarks Wednesday night, Trump tweeted that there was "such enthusiasm and energy for Judge Brett Kavanaugh ".

The Indonesian rupiah continued to decline, falling as much as 0.7 per cent versus the dollar and at its weakest in more than 20 years.

It comes just one day before the Indian central bank is expected to raise rates on Friday to prop-up the rupee.

China's financial markets are closed for the week. The rupee has depreciated around 15% in 2018 and is the worst-performing currency in Asia.

On Monday, the rupee tumbled 43 paise to end at a near two-week low of 72.91 against the US dollar amid a strengthening greenback and steady capital outflows.Higher US Treasury yields, which rose above the 3 per cent mark, boosted the appeal for the dollar, analysts said.

Consistent dollar demand from importers, mainly oil refiners, following higher crude oil prices, also kept the rupee under pressure. "The rupee hit yet another record low today and in the near term, it doesn't look like there's any respite coming". During April-June India's balance of payments slipped into deficit for the first time in six quarters.