Rupee Hits New All-Time Low Of 73.77 Against Dollar

Rupee hits lifetime low of 73.34 against dollar

Indian Rupee breaches 73 mark, plunges to fresh all-time low

The dollar strengthened against the Chinese yuan by 0.2% to 6.9 in the offshore market and touched a fresh 20-year high against the Indonesian rupiah. The prospect of a more aggressive Fed also rattled regional equities.

The rupee was quoted 55 paise lower at 74.13 against the dollar soon after the RBI announced its monetary policy, reported PTI. Indian equities fell about 1.6 per cent. Traders said the Reserve Bank of India likely intervened to curb the rupee's fall.

Mr Khoon Goh, head of Asia research at ANZ Banking Group in Singapore, said the mix of strong United States data and the Fed chair's comments bumped up the dollar and U.S. bond yields, putting downward pressure on Asian currencies.

Taking a more gradual approach to raising rates should make it easier to sustain economic growth, with the RBI forecasting expansion of 7.4 percent for the financial year ending in March and 7.6 percent for the following year. Of 15 economists surveyed by Mint, 14 expected the RBI to raise the repo rate, the rate at which it lends to commercial banks, to 6.75%. The rupee has depreciated almost 15 percent this year, becoming the worst-performing currency in Asia apart Indonesia and the Philippines.

An expected rate hike would be the Reserve Bank of India's (RBI) third this year, after it lifted borrowing costs in June and August.

The rupee Friday breached the 74-mark against USA dollar for the first time as the Reserve Bank of India announced its key policy rate would remain unchanged. It slid to an all-time low of 73.81 per dollar due to rising crude prices and reports that the RBI "cannot afford" a special swap window for oil importers to meet the dollar demand. Both the indices hit their lowest levels in three months. Higher prices have swollen India's current account deficit, which last stood at around 2.4 per cent of GDP, in the April-June quarter. "It is because of the higher oil prices that weigh on the sentiment".

India now imports more than two-thirds of its oil needs.

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