Rupee hits fresh record low against US dollar as emerging currencies slide

Posted on by KNBT

So far this year, the rupee has weakened 7.7%, while foreign investors have sold $260.40 million and $5.43 billion in equity and debt markets, respectively. Photo: Mint

So far this year, the rupee has weakened 7.7%, while foreign investors have sold $260.40 million and $5.43 billion in equity and debt markets, respectively. Photo: Mint

Mumbai: The Indian rupee on Monday slumped to a fresh record low against the US dollar as emerging-market currencies weakened amid concern over the risk of contagion from Turkey’s financial-market turmoil. At 9.13am, the rupee was trading at 69.46 a dollar, down 0.9% from its previous close of 68.84. The currency opened at 69.49 a dollar and touched an all time low of 69.49. Turkey’s lira tumbles as much as 12.5% against the dollar as the nation heads for a full-blown financial crisis.

On Friday, US President Donald Trump announced the decision in a tweet following a defiantly nationalist speech by Turkish President Recep Tayyip Erdogan in which he vowed that his country wouldn’t bow to “economic warfare.” Tensions have intensified in recent weeks over Turkey’s detention of an American evangelical pastor. Traders were worried over the Turkish economy and deteriorating times with US continued to drag down the currency.

The 10-year bond yield stood at 7.802%, from its Friday’s close of 7.754%. Bond yields and prices move in opposite directions.

Benchmark Sensex Index fell 0.43% or 164.39 points to 37,704.84. Since January, it has gained 11.65%.

Traders are also cautious ahead of Consumer Price Index-based (CPI) inflation data for June due later on Monday. According to a Bloomberg poll of analysts, CPI inflation will be at 4.47% in June from 5% a month ago.

So far this year, the rupee has weakened 7.7%, while foreign investors have sold $260.40 million and $5.43 billion in equity and debt markets, respectively.

Asian currencies were trading weaker. Indonesian rupiah was down 0.9%, South Korean won 0.62%, China renminbi 0.49%, Philippines peso 0.35%, Taiwan dollar 0.31%, China offshore 0.29%, Singapore dollar 0.19%, Thai baht 0.19%, Malaysian ringgit 0.16%. However, Japanese yen was up 0.59%.

The dollar index, which measures the US currency’s strength against major currencies, was trading at 96.412, up 0.06% from its previous close of 96.357.

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