Rupee logs biggest decline globally in August: WFE
Indian currency emerged as the worst performer among its global peers with a fall of 8.7% last month, owing largely to economic slowdown and poor investor confidence.business Updated: Sep 22, 2013 10:53 IST
Indian currency emerged as the worst performer among its global peers with a fall of 8.7% last month, owing largely to economic slowdown and poor investor confidence.
The fall in rupee value against the US dollar was the worst compared to its peers across Asia, Americas, Africa, Europe and the Middle East in August, as per the latest data compiled by the World Federation of Exchanges (WFE).
The rupee fell to an average of 66.07 in August from 60.80 in the previous month against the US dollar, marking a drop of 8.7%, although there has been some recovery in the current month.
Rupee hit a life-time low of 68.85 against the US dollar on August 28.
In terms of decline during August, rupee was followed by Indonesian rupiah (6.3%), Turkish lira (4.9), Brazilian real (4.1) and Mexican peso (4).
"In addition to impact of change in global investment fund flow, India's peculiar reasons like high trade deficit and worsening investor confidence amid tax uncertainty and policy paralysis have contributed to rupee depreciation," Deloitte Haskins & Sells Partner Atul Dhawan said.
Massive capital outflows to the tune of Rs 62,000 crore ($10.5 billion) by foreign investors in the June-July had added to pressure on rupee.
"Nonetheless, there are signs of optimism as recently improved performance in external sector has delivered better results in September and rupee has gained the most in last 20 days as compared to its peers," he added.
So far in September, rupee has appreciated nearly 5% on back of renewed investor sentiments.
While India witnessed a sharp decline in its currency, its neighbour China's yuan has gained 0.2% against the US dollar. The maximum currency appreciation was noticed by Korea's won (1.2%) in the month of August.
The other top 10 countries in terms of maximum depreciation in currency values were Norway's krone (6th rank), South Africa's rand (7th), Argentina peso (8th), Thailand's baht (9th) and the Philippine's peso (10th).