Rupee hits record low of 69.61 per USD

The USD/INR pair opened at 69.48 and rose to a new lifetime high of 69.61 as the other Emerging Market (EM) currencies tanked in response to the crisis in Turkey. At press time, USD/INR is trading at 69.52. Turkey’s Lira fell more than 25 percent last week and extended the drop to a fresh record low above 7.00 per dollar.

Other EM currencies are also flashing red. Indonesian rupiah fell 0.9% in early trade. South Korean won dropped 0.62%, China renminbi 0.49%, Philippines peso 0.35%, Taiwan dollar 0.31%, China offshore 0.29%, Singapore dollar 0.19%, Thai baht 0.19%, Malaysian ringgit 0.16%. However, anti-risk Japanese yen gained 0.59%, possibly due to risk aversion.

The President of US Donald Trump has announced the decision in a tweet. The Turkish President Recep Tayyip Erdogan said that the Turkey won’t bow to the “economic  warfare”.  Trades are worried over the Turkish economy and the deteriorating times with United States has continued to drag down the currency. The 10-year bond yield stood at 7.802%, from 7.754%. The Benchmark Sensex Index has also reduced to 0.43% or 164.39 points to 37,704.84. Since January, it has gained 11.65%.

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The traders are also cautious ahead of the Consumer Price Index-based (CPI) inflation data for the month of June. According to a Bloomberg poll of analysts, CPI inflation will be at 4.47% in June from 5% a month ago. So far this year, the rupee has weakened 7.7%, while foreign investors have sold $260.40 million and $5.43 billion in equity and debt markets, respectively.

Asian currencies were trading weaker. Indonesian rupiah was down 0.9%, South Korean won 0.62%, China renminbi 0.49%, Philippines peso 0.35%, Taiwan dollar 0.31%, China offshore 0.29%, Singapore dollar 0.19%, Thai baht 0.19%, Malaysian ringgit 0.16%. However, Japanese yen was up 0.59%. The dollar index, that measures the currency strength of United States against all the major currencies, was trading at 96.412, up 0.06% from its previous close of 96.357.

The Turkish lira plunged nearly 14 per cent after Turkish President Recep Tayyip Erdogan asked citizens to convert their dollars and other foreign currencies as well as gold holdings to local lira. In cross currency trade, the rupee has pulled down against the pound sterling to end at 87.86 per pound from 88.53 and the euro also bounced back against the euro to close at 78.83 as compared to 79.61 earlier. But, the Japanese yen drifted further to settled at 62.03 per 100 yens from 61.81

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