Indian rupee plunges to record low of 86 per dollar

The Indian rupee fell to an all-time low of 86.4 per United States dollar on Monday as strong US jobs data, higher Treasury yields and a surging dollar index exerted pressure on emerging market currencies, reported Reuters.

The rupee weakened 0.5%, touching 86.4187, reflecting broader declines in most Asian currencies after robust US economic data reduced expectations of further Federal Reserve rate cuts.

The Treasury yield are the returns that investors can expect from holding a US government security.

The dollar index is a measure of the value of the United States’ currency relative to a basket of foreign currencies such as the British pound and the Japanese Yen.

The Indian rupee’s downward spiral has been exacerbated by weak capital inflows, rising oil prices and dwindling supplies of the US dollar in local markets.

Foreign investors have withdrawn over $4 billion from Indian equities this month, adding to the nearly $11 billion withdrawn in the previous quarter.

“The US dollar continues its upward march, driven by the Federal Reserve’s cautious stance and solid economic data,” Amit Pabari, managing director at CR Forex, was quoted as saying by Bloomberg.

Oil prices climbed above $81 per barrel after US President Joe Biden imposed new sanctions on Russia, further exacerbating India’s trade deficit and intensifying dollar demand. “The rise in crude prices...

Read more