Rupee hits new low of 73.34

Rupee plunges to fresh record low of 73.77 against dollar

The domestic currency closed at a record low of 73.34, down by 43 paise or 0.59 per cent on Wednesday. Rising global crude oil prices, a widening current account deficit at home, and fears of worldwide trade wars have spooked the currency market, leading to several currencies underperforming versus the dollar.

The latest rupee sell-off is a mirror image of the sell-off in 2013, and the RBI's response back then was just as lacklustre as it is today.

The rupee touched a life-time low of 73.41 against the U.S. dollar as crude prices jumped above $85 per barrel on expectations of tighter supply once the USA sanctions start targeting Iran's petroleum industry from next month.

India's rupee declined and stocks entered a correction after the central bank kept interest rates unchanged, surprising investors who expected the authority to step up its defense of Asia's worst-performing major currency. The rupee has been in freefall in the year so far owing to capital outflows as foreign investors rerouted funds from emerging markets like India to safe havens like the United States, where the Federal Reserve is tightening rates.

United States jobless rate falls to 49-year low
An Institute for Supply Management survey published this week showed robust employment gains in the services sector in September. Last month, average hourly pay increased 2.8 percent from a year earlier, one tick below the year-over-year gain in August.


The 10-year benchmark bond yield fell to 8.05 percent from 8.13 percent before the policy was announced, as traders expecting a rate hike were caught wrong-footed.

"An alleged last minute intervention on exchange traded futures from the central bank saved the day for rupee", said Anindya Banerjee, Deputy Vice President for Currency and Interest Rates with Kotak Securities.

Admitting that the country has not been immune to global spillovers from external factors, Patel said, "The rupee fall, in some respect, is moderate in comparison to several other emerging market market peers".

"Most of the Asian and emerging currencies are calmer in past one month".

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Life is on hold for thousands living in tents and shelters in Indonesian city hit by a powerful natural disaster and tsunami. Aid has begun to arrive after the disaster, however the pace remained slow due to damaged infrastructure.


The data in August showed 210,000 jobs created while unemployment was at 3.8%. In the Euro area, inflation pressures have been sustained by elevated crude prices, the committee noted.

"Rupee was caught off guard and weakened beyond 74, after RBI surprised markets by keeping rates unchanged". The finance minister said on Tuesday that the economy was adjusting "quite well" to higher US interest rates and the fall of the rupiah, asserting that many of its economic indicators were good.

In the Monetary Policy Report, the RBI said headline inflation will accelerate to 4.5 per cent by March 2019 quarter with upside risks.

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Reports last night suggested the Red Devils would sack Mourinho , regardless of the result against Newcastle . Neville will be at Old Trafford this weekend and he will be backing Mourinho .


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