What triggered rupee’s new record low at 69.60
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The rupee hit a new record low as the looming trade war worries, triggered by plunging Turkish lira, aided the dollar to gain against all major global currencies.
The local unit lost more than 1% to the greenback hitting 69.62 in the early morning trade prompting the Reserve Bank of India to intervene.
The rupee had showed signs of weakness in the Singapore non-deliverable forwards (NDF) market before the domestic currency market opened for trading back in India.
The dollar-rupee pair breached the crucial 69 level with speculator short-selling emerging market currencies like the rupee against the dollar. Back home, the rupee resumed trading hitting life-time low in a week, shortened by public holidays.
NDF is the offshore derivative market, where speculators, investors cut over-the-counter deals.
“The plunging Turkish lira has aggravated global trade worries with investors seeking safety of dollar-backed assets,” said Anindya Banerjee, currency analyst at Kotak Securities. “The weakness is weighing on the rupee in the domestic market too.”
Some state-owned banks are seen selling the dollars on behalf of the central bank, a move that is aimed to resisting the rupee’s free fall, dealers said.
At 11:00 hours, it pared some of its early losses to trade at 69.46 a dollar.
The dollar index, which measures the unit against major global currencies, gained about 1.5% in past three-four trading sessions reflecting that international investors are seeking safety of US-backed assets among worsening global trade war worries.
The rupee has lost 7.2% this year and remains one of the worst performing emerging market currencies.
But, the rupee rout has faded away after Turkish lira, Russian ruble, Argentine peso significantly weakened against the dollar. They all dipped anything between 15 and 40% since the beginning of the year.
This has made the rupee as relatively better performing currency with the local unit now ranking the second best among the emerging market lot.
The local unit lost more than 1% to the greenback hitting 69.62 in the early morning trade prompting the Reserve Bank of India to intervene.
The rupee had showed signs of weakness in the Singapore non-deliverable forwards (NDF) market before the domestic currency market opened for trading back in India.
The dollar-rupee pair breached the crucial 69 level with speculator short-selling emerging market currencies like the rupee against the dollar. Back home, the rupee resumed trading hitting life-time low in a week, shortened by public holidays.
NDF is the offshore derivative market, where speculators, investors cut over-the-counter deals.
“The plunging Turkish lira has aggravated global trade worries with investors seeking safety of dollar-backed assets,” said Anindya Banerjee, currency analyst at Kotak Securities. “The weakness is weighing on the rupee in the domestic market too.”
Some state-owned banks are seen selling the dollars on behalf of the central bank, a move that is aimed to resisting the rupee’s free fall, dealers said.
At 11:00 hours, it pared some of its early losses to trade at 69.46 a dollar.
The dollar index, which measures the unit against major global currencies, gained about 1.5% in past three-four trading sessions reflecting that international investors are seeking safety of US-backed assets among worsening global trade war worries.
The rupee has lost 7.2% this year and remains one of the worst performing emerging market currencies.
But, the rupee rout has faded away after Turkish lira, Russian ruble, Argentine peso significantly weakened against the dollar. They all dipped anything between 15 and 40% since the beginning of the year.
This has made the rupee as relatively better performing currency with the local unit now ranking the second best among the emerging market lot.