Rupee at new record low of 68.86 |
The rupee on Nov 24, 2016, collapsed to a fresh life-time low of 68.86 against the dollar by crashing 30 paise amid sustained foreign capital outflows with investors being inclined towards US dollar, hoping protectionist measures by President-elect Donald Trump.Investors also remained cautious, weighing the impact of the demonetisation move. Surging US bond yields have also contributed to the rupee’s fall.Moreover, the US currency was trading at multi-year highs against its major rivals in overseas markets. This is to recall that the rupee had hit its all-time intra-day low of 68.85 and closed at 68.80 on August 28, 2013.Expectations that Mr. Trump will adopt an expansionary fiscal measures — which will drive inflation higher and lead to higher US interest rates — are behind surging US yields that have attracted investors towards the dollar.Consistent dollar demand from importers mainly kept the rupee under pressure. Incidentally, the Indian currency has shrunk 2.92 per cent since Trump’s victory in the polls earlier this month.
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