MUMBAI: Continuing its free fall, the Indian rupee hit another record low of 70.86 against the US dollar on Thursday. The domestic currency weakening against the greenback is in line with other Asian currencies that were tracking losses.
The currency opened at 70.69 a dollar, touched a fresh all-time low of 70.86 and a high of 70.59 and eventually closed at 70.74 a dollar, down 0.20 per cent from its previous close of 70.59. So far this year, the rupee weakened by nearly 10 per cent to emerge as the worst-performing Asian currency.
Traders anticipate that the central bank will intervene by selling dollars to strengthen the domestic currency. The RBI has already dipped into forex reserves spending about $26 billion. Foreign investors have already sold $455.53 million and $7.93 billion in equity and debt markets, respectively.
Expectations are also high that the government will use its surplus balances with the RBI to fund the fiscal slippage, and prevent further erosion of the rupee value. According to Economic Affairs Secretary Subhash Chandra Garg, surplus cash balance rose to Rs1.7 lakh crore as on March 2018 from Rs1.3 lakh crore last year.
Meanwhile, the dollar index, which measures the US currency’s strength against major currencies, was trading at 94.623, up 0.02 per cent from its previous close of 94.60. Other Asian currencies were trading lower too.
While Indonesian Rupiah fell 0.238 per cent, China renminbi lost 0.152, Philippine Peso 0.114 per cent, Malaysian Ringgit 0.085 per cent, Singapore Dollar 0.081 per cent, Thai Baht 0.055 per cent and Hong Kong Dollar 0.001 per cent. The 10-year bond yield stood at 7.931 per cent, from Wednesday’s close of 7.918 per cent, while benchmark Sensex lost 32.83 points to close at 38690.10.