Rupee is now perilously close to 66 per dollar
August 21, 2015 10:33
The rupee fell by another 27 paise to trade at fresh two-year low of 65.81 against the dollar today on sustained capital outflows by foreign funds even as the US currency weakened overseas.
Besides, strong demand for dollar from importers and banks and a lower opening in the domestic equity market weighed on the local currency, forex dealers said.
The rupee dropped even as dollar weakened against other major global currencies overseas amid mounting global economic slowdown worries.
The rupee is now trading at its weakest since September 2013, when India was in the midst of its worst currency turmoil in more than two decades. The rupee, along with most other emerging market currencies, has come under sustained selling pressure since China devalued its yuan on August 11.
Reserve Bank of India governor Raghuram Rajan on Thursday said China's devaluation of the yuan was not a concern, but did not rule out a currency war if the move was part of a long-term competitive devaluation.
The rupee has depreciated by nearly 3 per cent since China started devaluing its currency. That compares with 0.5 per cent depreciation in the rupee since January 1, 2015.
The depreciation in the rupee hits foreign investors and diminishes their returns.
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