Rupee hits record low amid dollar surge

The Indian rupee plunged to a historic low on Tuesday, pressured by a weakening Asian currency bloc and robust dollar demand in the non-deliverable forwards market.

The currency closed at 83.9525 per US dollar, a 0.1 per cent decline from the previous session’s close of 83.8450.

Fears of a potential US economic slowdown and the unwinding of carry trades involving the Chinese yuan have contributed to the rupee’s weakness this week.

However, the Reserve Bank of India (RBI) has intervened in the non-deliverable forwards, spot over-the-counter, and futures markets to stabilise volatility. State-run banks also sold dollars during the session, likely at the RBI’s behest.

The dollar index gained 0.2 per cent to 103.1, while most Asian currencies, particularly the Malaysian ringgit, tumbled.

While Treasury yields rose 6 basis points to 3.84 per cent, recent economic data and Fed officials’ comments have tempered concerns about a US slowdown.

Attribution: Reuters