Currency woes: Indian rupee drops to a record low at 80+to USD
New Delhi: Amid the Reserve Bank of India (RBI)’s attempts to tame inflation, and the Centre’s efforts to speed up development, the Indian rupee on Thursday dropped to a record low versus the US dollar, as other Asian currencies also declined on concerns over the pace and quantum of US Federal Reserve’s policy tightening ahead.
The INR closed at a record low of 80.86 to the US dollar, down from 79.9750 in the previous session.
It was the biggest single-day fall for the INR since February 24, the day Russia invaded Ukraine.
Some reports suggested the RBI may have stepped in by selling dollars to arrest the INR’s decline.
The INR remained under pressure after the US Fed sprung a hawkish outlook, the media reported. While the US Fed’s 75-basis-point rate was expected, the rate forecast surprised financial markets.
According to reports, the rates will reach 4.4 percent by the end of 2022, meaning a cumulative increase of 125 basis points over the remaining two meetings in November and December.
Policymakers, worried over the American economy’s performance, expect the rates to rise to 4.6 percent by the end of 2023.
With these fears, the Asian currencies plunged, and equities declined.
(VP)
