The Indian Rupee has been sliding ever since China decided to re-set the yuan
reference rate.
From about 63.76 against the US dollar in the first week of August, the currency is now at 66.5 – down 4%
In the June quarter, the average rupee rate against the dollar was 63.63, down from 59.87 in the same period last year, but margins of tech companies narrowed by about 1.1 % points in this period
In the last 12 months, despite the rupee depreciating 6.5 % against the dollar, it has appreciated by a sharp 11 % and 14 %, respectively, against the British pound and the euro
It is unfortunate that political economy considerations mandate that the rupee should not significantly depreciate against the US dollar. This becomes problematic when the US dollar appreciates vis-à-vis major currencies and gold
From about 63.76 against the US dollar in the first week of August, the currency is now at 66.5 – down 4%
In the June quarter, the average rupee rate against the dollar was 63.63, down from 59.87 in the same period last year, but margins of tech companies narrowed by about 1.1 % points in this period
In the last 12 months, despite the rupee depreciating 6.5 % against the dollar, it has appreciated by a sharp 11 % and 14 %, respectively, against the British pound and the euro
It is unfortunate that political economy considerations mandate that the rupee should not significantly depreciate against the US dollar. This becomes problematic when the US dollar appreciates vis-à-vis major currencies and gold
The turbulence in the currency market as the Chinese central bank linked
the yuan reference rate to the market saw the rupee hit a low of 65
against the dollar
While the sharp decline in the Wholesale Price Index (WPI) inflation to
minus 4.05 per cent provided some respite to the currency on Friday, the
positive impact proved to be short-lived as the weak trade deficit data
exerted pressure on the rupee once again.
India’s exports fell 10.3 % (year-on-year) in July, its eighth
consecutive monthly fall.
The trade deficit widened to $12.81 billion in
July from a deficit of $10.83 billion a month earlier.
On Monday Sep 07,2015,the Indian Rupee dropped to 66.89/dollar, a level last seen on September 4, 2013, before closing at 66.82, down 0.54 per cent from its previous close of 66.47
In the first three market days of September, global funds have net sold $384 million of Indian stocks, taking outflows this quarter to $2.1 billion
On Monday Sep 07,2015,the Indian Rupee dropped to 66.89/dollar, a level last seen on September 4, 2013, before closing at 66.82, down 0.54 per cent from its previous close of 66.47
In the first three market days of September, global funds have net sold $384 million of Indian stocks, taking outflows this quarter to $2.1 billion
The India Rupee’s decline since January 2015 is
no comparison to the declines in the Brazilian Real (-31 per cent),
South African Rand (-17 per cent), Russian Ruble (-15 per cent) or the
Indonesian Rupiah (-13 per cent).
If these currencies were hammered due to their countries’ reliance on
commodity exports, the rupee has been resilient since India is a net
commodity importer. Falling inflation, comfortable forex reserves and
the best real rate of interest helped too.
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