Indian Rupee hit a historic low of 69.93 in its exchange value vis-a-vis the dollar on Monday (13 August) despite intervention from the RBI, The Economic Times has reported. The rupee had opened at Rs 69.47 against the US Dollar.
According to the report, the rupee tumbled due to a purchase of dollars by importers and banks. A senior economist at HDFC bank was quoted as saying that based on the real effective exchange rate, the fair value of the rupee would overshoot Rs 70 to hover around Rs 73-74.
The dollar index which measures the unit against other major currencies gained by 1.5 per cent, in the last three-four trading sessions, which indicated that international investors are seeking the security of US-backed assets.
Earlier, the Turkish Lira had fallen after US President Donald Trump had doubled tariffs on steel and aluminium imported from the country. As a result of this, investors have been fleeing to safer markets, which pushed the dollar higher. The ongoing trade war between the US and China is also said to be contributing to the nervousness.
The fall of rupee will impact the country’s import bill, trade deficit and short-term liabilities. However, it will increase the earnings of Indian exporters.
From the start of 2018, the rupee has lost about 7.2 per cent against the dollar. Other currencies like Turkish Lira, Russian ruble and Argentine peso have depreciated by 15 to 40 per cent.
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