The rupee fell an over 2-year low of 67.09/dollar on Monday amid risk aversion in emerging market assets ahead of the US Fed meet later this week. This is the lowest value of the rupee since September 4, 2013.
Here are the latest updates:
1) At its day low, the rupee hit a low of 67.09 versus Friday's close of 66.88 per dollar. It traded at 67.05 as of 2:27 p.m.
2) The rupee is expected to trade in a range of 66.90 and 67.30 per dollar on Monday, according to Edelweiss Securities.
3) The rupee had closed lower for seven out of nine trading sessions this month; the currency fell 2.1 per cent against the dollar in November, making it the worst-performing emerging Asia currency.
4) The weakness in the rupee comes amid concerns that the Federal Reserve will raise interest rates in the US for the first time in nearly a decade on Wednesday.
5) Foreign investors have been selling in both equity and debt markets ahead of the crucial Fed meeting that begins on Tuesday. Since November 1, FIIs have sold about Rs 12,000 crore in Indian equity markets, pushing the rupee lower.
6) The Reserve Bank of India has been intervening in the rupee currency futures market to defend the currency. The central bank is also seeking to prevent wild swings in bond markets by agreeing to pay higher interest rates to investors at bond auctions. It is also buying bonds in the open market to stop yields rising too much. (Read here)
7) The rupee can fall to 67.80 per dollar this week, said Edelweiss Securities. "Given the Fed meeting over next two days, we expect a highly volatile week," the brokerage added.
8) The recent weakness in China's yuan currency, which hit fresh 4-1/2 year lows on Monday, also impacted emerging market currencies such as rupee, traders said.
9) The People's Bank of China on Monday continued guiding the currency lower, setting the yuan/dollar official midpoint at its weakest since July 2011. If China devalues its currency meaningfully, then there is a risk for rupee to depreciate to 68-70 against the dollar next year, Deutsche Bank added.
10) The currency market has also been impacted by the selloff in equity markets. The Nifty has shed 4 per cent in December to a three-month low of 7,575.
Source :ndtv.com
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