MUMBAI: The rupee hit an all-time low against the US dollar on Thursday, while markets predict the Asia’s worst performing currency to breach 70-71 levels.
High crude oil prices, rising trade war fears, and strengthening US debt yields pulled down not only the rupee but most Asian currencies as well.
Stubborn oil prices added to the current deficit woes of importing economies, while trade war fears spooked markets from Mumbai to Jakarta to Manila, forcing central banks to tighten liquidity by raising rates to shore up currencies, and tackle capital flight and inflation.
The rupee fell to an intraday low of 69.09 a dollar on Thursday but it recovered to 68.79 level following RBI’s indirect intervention by asking state-run banks to sell dollars. The fall exacerbates concerns of an inflated import bill and disrupts fiscal position including the current account deficit.
Notably, most southeast Asian markets also fell on Thursday as trade war worries intensified.