Rupee hits all-time low of 69 against US Dollar

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The last lowest record of Indian rupee was 68.8650 per dollar, which appeared on November 24, 2016
The last lowest record of Indian rupee was 68.8650 per dollar, which appeared on November 24, 2016

New Delhi : In business front, Indian rupee, today, recovered slightly from its lifetime low to trade at 68.95 per dollar in late morning deals in the course of heavy month-end demand for the American currency from importers and banks. 

In early trade today, the rupee fell to an all-time low tracking Asian peers, with deteriorating macro-economic fundamentals on the domestic border also weighing on the currency. The dollar's sharp gain immediately coupled with falls in Asian peers caused the drop in early trade, traders said, adding they were hopeful that the central bank would step in to prevent further losses.

The last lowest record of Indian rupee was 68.8650 per dollar, which appeared on November 24, 2016.

The dollar was, however, steady against its peers on Thursday, having failed to extend overnight gains amid contradictory signals from Washington on a proposal to restrict Chinese investment as the bitter US-China trade row kept financial markets on edge.

Coming to domestic frontage, a widening current account deficit (CAD) due to higher global crude oil prices and steady capital outflows have weighed on the rupee this year.

"Weakening at this pace shatters confidence. Markets expect RBI (Reserve bank of India) to manage the currency more effectively. The pressure on INR is high, thus in the absence of major action from regulators, 70 levels can be seen," the head of currency and debt trading at a foreign bank said. "The RBI has been effectively managing (the rupee) over the years, and they do have ample firepower to manage sharp falls."

Foreign exchange reserves stood at $410.07 billion as of June 15, as per the latest RBI data.

Oil prices have been rallying for much, this year is slimming down the market conditions due to record demand and voluntary supply cuts led by the Organization of the Petroleum Exporting Countries (OPEC).

Economy's March quarter CAD extended to $13.0 billion, or 1.9 per cent of GDP, from $2.6 billion, or 0.4 per cent of GDP, from a year earlier. Despite the rise in CAD, it remains humble in comparison to GDP and is largely financed by equity inflows, including foreign direct investment (FDI), Moody's said in a note on Thursday, adding that the large foreign exchange reserves provided a good buffer.

"India's low dependence on foreign-currency borrowing to fund its debt burden limits the risk of currency depreciation transmitting into materially weaker debt affordability," Moody's added.