Rupee closes at 68.74 against dollar after touching all-time low
After touching an all-time low of 68.86, the Indian rupee on Thursday closed at 68.74 against the US dollar as foreign investors consistently sold dollars due to demonetisation and renewed expectations of a US Fed rate hike.business Updated: Nov 24, 2016 17:45 IST
After touching an all-time low of 68.86, the Indian rupee on Thursday closed at 68.74 against the US dollar as foreign investors consistently sold dollars due to demonetisation and renewed expectations of a US Fed rate hike.
On Wednesday, it closed at 68.57 per dollar.
The rupee opened weaker on Thursday at 68.79 and later fell below the previous all-time low of 68.8 recorded on August 28, 2013. However, during the day, it recovered to 68.59 per dollar after the RBI intervened to limit further fall in the rupee.
But it erased the gains as the dollar continued to ts surge. The RBI has always maintained that it continues to intervene during extreme movement in the rupee.
Ever since the government demonetised the high-value currency notes on November 8, the rupee has fallen by 2.5%. This year, it has fallen by 3.9%.
In November, FIIs (foreign institutional investors) have sold $3.18 billion in local equity and debt, the most in three years.
The sharp strengthening of the dollar also kept the emerging currencies under pressure. India Ratings believes this will keep the rupee trading with a weakening bias in the near term.
On Wednesday, India Ratings Research Pvt. Ltd said in separate research reports that the RBI was likely to preserve forex reserves and utilise them judiciously, given the global risk aversion and greater probability of a US Federal Reserve hike.
Experts suggest the foreign capital outflows are temporary and that India’s economic outlook is positive given the increase in foreign exchange (forex) reserves, lowering inflation and a GDP growth rate of over 7%.