The Indian rupee closes at 90.19 versus the US dollar, down 0.36% from the previous close, setting yet another record low. The currency has declined by over 5% on a cumulative basis this year against the greenback. A stalled trade agreement between the US and India, persistent equity sales by foreign portfolio investors, and a short supply of US dollars have all been blamed for the rupee’s losing run. Lack of involvement of the central bank also added to the downward pressure on the currency.
During Wednesday’s intraday session, the local currency fell 34 paise from its previous close to a historic low of 90.30. The currency has already breached the psychologically crucial 90-per-level in the inter-bank order matching mechanism yesterday.
However, the outlook of the rupee remains clouded by concerns over the outcome of the India-US trade and the strengthening of the dollar. The greenback dropped on increased prospects of a rate cut by the US Federal Reserve. One of the Asian currencies with the worst recent performance has been the rupee.
The central bank is anticipated to address the issue of the sinking local currency during its present MPC meeting. Markets now await the MPC meeting’s decision.
