The rupee hit a record low of 68.86 against the dollar during intra-day trading on Thursday. This is the fifth consecutive day that the rupee has fallen. Since Donald Trump was elected the next United States president on November 9, the Indian currency has nosedived 2.92%. The currency has fallen by 3.9% against the dollar this year, according to Mint.
On Wednesday, it had hit a nine-month low when it touched 68.56 against the dollar. Market analysts listed several reasons for the fall, including a huge demand for the dollar from importers, the chance of a federal rate hike and a poor opening by the domestic equity market.
The continuous outflow of capital by foreign investors has also contributed to the weakening of the rupee. The outflow of funds has been triggered as investors fear the short-term impact of demonetisation by the Centre.
Experts, however, had expected this. Based on this, brokerage firms have now revised their year-end forecast for the home currency. BNP Paribas estimated that the rupee will be trading at 68 till the end of the year. Deutsche Bank, on the other hand, said it may cross 70.
Meanwhile, the Bombay Stock Exchange Sensex fell by 145.97 points to 25,905.84 and Nifty50 opened 42.40 points down at 7990 during the early trading hours on Thursday. The benchmark 10-year government bond yield was trading at 6.316%
Most Asian currencies slumped against dollar gains. The South Korean won was down 0.54%, Malaysian ringgit 0.45%, Indonesian rupiah 0.36%, Philippines peso 0.28%, Singapore dollar 0.27%, Taiwan dollar 0.21%, Japanese yen 0.18% and Thai baht 0.05%.
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