Indian rupee hits new record low on Dec. 18th

The Indian rupee reached a new record low on Wednesday, driven by strong demand for US dollars from importers and speculators before the US Federal Reserve’s policy decision. The rupee fell to 84.9325, surpassing its previous low of 84.93 from the day before.

“Natural dollar demand (from importers), lack of supply” is “squeesing” the rupee, a currency trader at a bank, said.

Overall, the bias is leaning towards a higher dollar/rupee, and there may be a bit of accumulation of long positions before the Fed.

The rupee is facing pressure due to concerns about India’s growth and a strong dollar after Donald Trump’s election win. This week, data revealed a record-high trade deficit in November.

The widening trade deficit and slower capital inflows will lead to a significant balance of payments deficit for the rupee this quarter.

Attribution: Reuters

Subediting: Y.Yasser