Thursday, 24 November 2016

Where is the rupee headed?

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Rupee hit a record low of 68.86 against the US dollar (USD) in intra-day deals on Thursday, surpassing its earlier all-time intra-day low of 68.85 hit on August 28, 2013. The rupees’ near 3% decline in November compares with a 5.6% loss for Malaysia’s ringgit, the worst in Asia, and a 3.2% drop in Indonesia’s rupiah, data show.

Government’s efforts to cleanse the economy of black money via the demonetisation route, surprise outcome of the US Presidential elections and the possibility of a hike in key rates by the US Federal Reserve (US Fed) in its December meeting that triggered has led to outflows from emerging markets, including India, are the key reasons for rupee’s weakness against the US dollar.


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