Rupee nears 67.5 vs dollar; traders see further fall as oil, China downslide continues

The downward spiral in the rupee continued against the dollar in noon trades Friday, with the domestic currency falling 15 paise to trade at 67.445 against the dollar after hitting a low of 67.47 in early trades.

Rupee nears 67.5 vs dollar; traders see further fall as oil, China downslide continues


With domestic currency mirroring the weakness in the Chinese yuan, falling local equities and persisting overseas fund outflows, too, has been adding to the overall gloom in the forex market.

Currently, the BSE 30-share Sensex is down 0.3 percent or 77 points to trade at 24,695 amid weak Asian market cues.

Earlier today, the domestic unit was at 67.35 per dollar as against yesterday's closing level of 67.29 at the Interbank Foreign Exchange (Forex) market.

It hovered in a range of 67.39 and 67.24 during morning deals before quoting at 67.44 per dollar in the noon trades.

The dollar index was down by 0.10 percent at 98.97 against a basket of six currencies in early trade.

The current fall in rupee has been swift and gradual, and since May 22, 2014 (four days after BJP got majority in Lok Sabha election), the domestic currency has depreciated by 8.83 percent or Rs 15.10 from its high of Rs 58.46 to the yesterday's closing level of 67.29.

The rupee had hit its all-time low of 68.80 on 28 August 2014, just few days before the current RBI governor Raghuram Rajan took the charge from his predecessor.

Just when it looked like the currency was strengthening towards Rs 66/$ few weeks back, the rupee breached the 67 a dollar mark to trade at 67.11 on 14 December 2015.

Traders expect the rupee to weaken further in the near term as slumping oil prices and volatility in China's market continue to roil emerging market currencies.

Despite the ongoing depreciation, the rupee has still performed relatively better this year than other Asian emerging market currencies, having lost about 1.6 percent against the dollar, compared to a fall of around 3.4 percent in the South Korean won and a drop of around 2.3 percent in the Malaysian ringgit.

Also, the market is always guessing which way the RBI will react to such swings in the rupee. The RBI will play a critical role in terms of limited intervention in the light of the exports effect. Higher imported inflation will be the concern on the other side.

With inputs from PTI

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Updated Date: Jan 15, 2016 13:03:15 IST

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