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Indian rupee ends at record closing low of 72.45/$

The currency did manage to recover from its low points, an intraday low of 72.67 per US dollar

September 10, 2018 / 05:31 PM IST

The Indian rupee on September 10, 2018 ended the session on a record low note of 72.45 per US dollar. Multiple factors such as global trade war concerns, selloff in emerging markets along with worries on domestic macro front after trade and current account deficits widened, weighed on it.

Having said that, the currency did manage to recover from its low points, an intraday low of 72.67 per US dollar. On Friday, the currency had closed at 71.73 per US dollar.

According to an alert on CNBC-TV18, the currency posted the biggest single session decline against the dollar since August 13.

A weak rupee also impacted bond yields, which rose to their highest levels since November 2014.

Earlier in the day, analyst told Moneycontrol that the rupee fell due to weakness among emerging markets.

Also Read: Rupee weakness continues: 5 key points analysts want you to know

“High oil prices is affecting the currency idiosyncratically, which is an added factor. Overall, it is the selloff in EM currencies in Argentina, China, South Africa and Brazil, among others that is driving the selloff. Additionally, a combination of intensifying trade wars and strong US economic data supporting interest rate hikes is also leading to the selloff, Anindya Banerjee, Deputy Vice President, Currency Derivatives, at Kotak Securities told Moneycontrol.

Further, supply vacuum of the dollar is also adding to the woes and leading to speculative moves. “Exporters had hedged their positions when the rupee was trading below 69 per dollar, while importers were grossly unhedged. So, the demand is now coming in from importers, while exporters are looking to cancel it,” he further explained.

Going forward, experts anticipate some pain too. “We expect that rupee could continue to feel the pain in the short term and intervention could restrict the pace but bias for the rupee is still negative. Rupee, in the short term, could test levels of 73.20 and break above 72.15 could negate the view for short term weakness,” Gaurang Somaiya, Currency Analyst at Motilal Oswal Financial Services said in a statement.

Moneycontrol News
first published: Sep 10, 2018 05:31 pm