Active Stocks
Thu Mar 28 2024 15:59:33
  1. Tata Steel share price
  2. 155.90 2.00%
  1. ICICI Bank share price
  2. 1,095.75 1.08%
  1. HDFC Bank share price
  2. 1,448.20 0.52%
  1. ITC share price
  2. 428.55 0.13%
  1. Power Grid Corporation Of India share price
  2. 277.05 2.21%
Business News/ Market / Stock-market-news/  Rupee falls to 14-month low, edges closer to being worst hit among Asian peers
BackBack

Rupee falls to 14-month low, edges closer to being worst hit among Asian peers

Rupee ended at 66.90 against US dollar a level last seen on 22 February 2017, down 0.76% from its Tuesday's close of 66

The rupee opened at 66.47 and touched a low of 66.91 a dollar. Photo: Pradeep Gaur/MintPremium
The rupee opened at 66.47 and touched a low of 66.91 a dollar. Photo: Pradeep Gaur/Mint

Mumbai: The Indian rupee on Wednesday edged closer to becoming worst currency of Asia in so far 2018 after foreign investors continued to sell in the local equities and bonds amid a surge in international crude oil prices and US bond yield.

Currently, Philippine Peso is the worst currency as it dropped 4.6% while rupee declined 4.52% so far this year. The currency closed at a 14-month low against US dollar.

Other Asian currencies have either risen or the fall is lower compared to India and Philippines.

The home currency ended at 66.90 against US dollar a level last seen on 22 February 2017, down 0.76% from its Tuesday’s close of 66.11. The rupee opened at 66.47 and touched a low of 66.91 a dollar.

So far April, foreign investors have sold a combined of over $2 billion in local equity and debt market on the concerns of continued rising oil prices and the US treasury 10-year yields. US bond yield on Tuesday climbed above 3% for the first time in four years.

Recent hawkish commentary by Reserve Bank of India and data that showed current account deficit widened to $13.50 billion for October-December quarter from $7.21 billion a quarter ago also dampened the sentiments.

Many brokerages have started cutting forecast of rupee. ICICI Bank Global Markets expects that the currency to hit 67 mark in the near term while CARE ratings sees rupee rate between 66.5-67 a dollar by March 2019.

Standard Chartered Plc, Australia & New Zealand Banking Group Ltd, TD Securities and Malayan Bank have pared their targets for the currency. Kotak Mahindra Bank Ltd has gone so far as to say that the rupee could fall past its 2016 record low of 68.89 per dollar if global and local risks play out, Bloomberg report said.

“Given the current environment of rising crude oil prices and concerns about the domestic macroeconomic landscape, we do not rule out the Rupee pair testing the 67 levels in the near-term. The RBI could step-up intervention to ensure that depreciation is not disorderly," said ICICI Bank Global Markets in a note.

“While a possible pull-back in oil prices as the supply of oil picks up over the medium term could reduce some of the pressures, we continue to expect lower capital inflows because of deteriorating ‘INR fundamentals’", the report added.

Yields on 10-year government bond stood at 7.738% from its previous close of 7.686%. Bond yields and prices move in opposite directions.

Benchmark Sensex index fell 0.33% or 115.37 points to 34,501.27 points. Year to date, its up 1%.

“The rise in crude oil prices is putting pressure on sources of India’s macro stability—low inflation, and lower current account and fiscal deficits—and weighing on the rupee. Higher oil could spell more depreciation than we had expected," said Abhishek Gupta economist at Bloomberg.

Year to date, foreign investors have bought $1.47 billion and sold $1.15 billion in equity and debt markets, respectively.

Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!

Catch all the Business News, Market News, Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.
More Less
Published: 25 Apr 2018, 09:25 AM IST
Next Story footLogo
Recommended For You
Switch to the Mint app for fast and personalized news - Get App