ADVERTISEMENT

Trade war, Kashmir issue dent rupee to biggest fall in 6 years

ADVERTISEMENT
The impact of the US-China trade war along with domestic political factors led the Indian rupee to its biggest fall since September 2013 on Monday.
 
Global cues, such as a rise in protectionist measures along with a massive fall in the Chinese Yuan and other emerging markets (EMs) currencies, dented the Indian rupee.
 
Additionally, the abrogation of Article 370 which provided special status to Jammu and Kashmir, spooked foreign investors, further impacting the rupee. 
 
The Indian rupee weakened to 70.7350 per US dollar from its previous close of 69.6013.
 
The currency had opened at 70.06 to a greenback. It ranged, thereafter, between 70.06-70.7350 to a dollar.
 
"The rupee suffered one of its biggest falls today on the back of the heightened trade tensions between the US and China which led the Chinese yuan to depreciate to 7 per USD," Anindya Banerjee, senior currency analyst at Kotak Securities, told IANS.
 
"Apart from trade war, the abrogation of Article 370 and consequent domestic political tensions too weighed heavy on the rupee; as FIIs sold over Rs 2,000 crore in the equity segment." 
 
Besides, market observers cited an apparent intervention from the central bank to defend the currency. 
 
The Reserve Bank of India (RBI) is known to intervene in the markets via intermediaries to buy or sell US dollars to keep the rupee in a stable orbit.
 
According to Sajal Gupta, Head Forex and Rates, Edelweiss Securities: "The rupee depreciated in tandem with other Asian currencies. CNY depreciated to an 11-year low, the rupee too followed the same path and depreciated almost 1.7 per cent in a single day -- biggest fall -- since September 2013."
 
IANS
 

(Our News Desk can be contacted at desk@netindian.in)

Did you like this story? Make a donation and help us to serve you better.
ADVERTISEMENT
 

Comments

Post new comment

The content of this field is kept private and will not be shown publicly.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Allowed HTML tags: <a> <em> <strong> <cite> <code> <ul> <ol> <li> <dl> <dt> <dd> <canvas>
  • Lines and paragraphs break automatically.

More information about formatting options

© Copyright 2012 NetIndian. All rights reserved. Republication or redistribution of NetIndian content, including by framing or similar means, is expressly prohibited without the prior written consent of NetIndian Media Corporation. Write to info[AT]netindian[DOT]in for permission to use content. Read detailed Terms of Use.