1. Indian rupee slides to nearly 63 against US dollar

Indian rupee slides to nearly 63 against US dollar

The rupee saw its biggest single-day fall in three months on Monday to end the session at an eleven-month low of 62.94...

By: | Updated: December 16, 2014 10:38 AM

The rupee saw its biggest single-day fall in three months on Monday to end the session at an eleven-month low of 62.94 against the greenback, even as the dollar gained ground against several major currencies across the world, reports fe Bureau in Mumbai. With the trade deficit for November widening by 26% to $16.86 billion, the currency market believes the rupee could slip beyond 63/$.

Meanwhile, the Indonesian Rupiah hit a 16-year low of 12698/$, owing to a rout in Indonesian sovereign bonds.

The central bank has bought nearly $60 billion from the market between January and October, lifting the country’s forex reserves to $314.7 billion, data from the Reserve Bank of India (RBI) showed. Foreign investors have invested $43 billion into bonds and equities so far in 2014.

graph-rupee

Despite the fall in recent weeks, the rupee has stayed on top of its emerging market peers, especially its closest competitor — the Indonesian Rupiah — as the best performing currency. At this level, the rupiah is down 4.27% so far in 2014.

Among other Asian currencies, the Malaysian ringitt is down by 6.3%, South Korean won is weaker by 4.5% while the Chinese renminbi is down 2.25%. The Russian rouble has been the worst performer with a fall of 45% followed by the Argentinian peso which fell by over 23%.

Government data had showed that foreign investors pulled out 10.09 trillion rupiah ($795 million) so far this month through December 11. In contrast, foreign institutional investors continue to pump in dollars into India. In December so far, FIIs have bought $1.79 billion of bonds and $810 million of Indian equities.

HSBC expects the rupee to outperform its peers even in 2015 as a strong central government, lower oil prices and improving inflation situation will contribute to the currency’s strength, the bank said. However, the Reserve Bank of India’s dollar purchases could weigh on the currency.

“The RBI was the only bank outside of North Asia to buy dollars in November, and it is doing so at increasingly higher levels of USD-INR,” HSBC said in a report. This buying has dragged the rupee 3.84% between September and now.

Get latest news and updates on Auto Expo 2018, check breaking news on Budget 2018, like us on Facebook and follow us on Twitter.

  1. No Comments.

Go to Top