Rupee crashes to 23-month low

Mumbai, Aug 24 (IANS) A massive sell-off in the Indian equity markets pushed the Indian rupee to a 23-month low of Rs.66.79 to a dollar during intra-day trade on the foreign exchange markets.

The rupee closed at the Rs.66.79-mark on the day when a barometer index of the Indian equity markets plunged by 1,624.51 points, or 5.94 percent — its steepest fall in terms of points.

“Rupee is following the equities fall. The sell-off in the global equities has impacted the rupee badly. If the sell-off continues, we might see rupee plunging further,” Hiren Sharma, senior vice president, currency advisory at Anand Rathi Financial Services, told IANS.

The major catalyst for the rupee’s fall has been the devaluation of yuan, intended to boost Chinese exports.

China’s central bank devalued yuan by two percent on August 11. This was the biggest devaluation of the Chinese currency since 1994.

The currency fell again by another two percent on August 12 panicking the world economy.

The measure to devalue the yuan is also seen as an attempt to arrest the implosion in the Chinese markets– whose benchmark index fell by over 8 percent on Monday, prompting fears of another round of yuan devaluation.

The yuan has fallen by 4.6 percent till now since August 11.

The world markets are fearful of the fact that the $10 trillion dollar Chinese economy has the ability to dump unlimited amounts of goods and services, thereby cornering the entire international exports customers base.

“The next move in the rupee will depend on the global situation and the Reserve Bank of India (RBI). A major part of the global cues will emanate out of China, as the Chinese government will take steps to arrest the fall in their markets,” Anindya Banerjee, senior manager for currency derivatives with Kotak Securities, told IANS.

Leave a Reply

Please enter your comment!

The opinions, views, and thoughts expressed by the readers and those providing comments are theirs alone and do not reflect the opinions of www.mangalorean.com or any employee thereof. www.mangalorean.com is not responsible for the accuracy of any of the information supplied by the readers. Responsibility for the content of comments belongs to the commenter alone.  

We request the readers to refrain from posting defamatory, inflammatory comments and not indulge in personal attacks. However, it is obligatory on the part of www.mangalorean.com to provide the IP address and other details of senders of such comments to the concerned authorities upon their request.

Hence we request all our readers to help us to delete comments that do not follow these guidelines by informing us at  info@mangalorean.com. Lets work together to keep the comments clean and worthful, thereby make a difference in the community.

Please enter your name here