The Indian Rupee collapsed to a fresh life-time low of 68.86 against the dollar
by crashing 30 paise amid sustained foreign capital outflows with
investors being inclined towards US dollar on hopes of protectionist
measures by President-elect Donald Trump.
Investors also remained cautious weighing the impact of government’s
demonetisation move. Surging US bond yields have also contributed to the
rupee’s fall.
Moreover, the US currency was trading at multi-year highs against its major rivals in overseas markets.
The rupee had hit its all-time intra-day low of 68.85 and closed at 68.80 on August 28, 2013.
Expectations that Trump will adopt an expansionary fiscal measures —
which will drive inflation higher and lead to higher US interest rates —
are behind surging US yields that have attracted investors towards the
dollar.
Consistent dollar demand from importers mainly kept the rupee under pressure.
At the interbank foreign exchange market, the rupee opened lower at
68.76 a dollar against 68.56 previously and dropped to an all-time
intra-day new low of 68.86 in the afternoon trade. It hovered in a range
of 68.86 and 68.59 before quoting at 68.71, down 15 paise at 3.45 pm
local time.
The Indian currency has shrunk 2.92 per cent since Donald Trump’s victory in the US Presidential polls earlier this month.
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