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June 28, 2018 | Rupee Sinks to All-Time Low vs. US Dollar

Mike 'Mish' Shedlock

Mike Shedlock / Mish is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction.
The Rupee hit a new low vs the US dollar today crossing the 69 threshold for the first time.

The Rupee hit a Record Low against the US dollar today on oil and emerging market concerns.

While most currencies have been losing ground against the dollar, the rupee’s 8% slide in 2018 makes it Asia’s worst-performing currency. Among other emerging markets, only Argentina, Brazil, Russia, Turkey and South Africa have performed worse.

The rupee has been sliding despite central-bank efforts to prop it up and attract investment. Earlier this year, the Reserve Bank of India increased corporate-bond investment limits and relaxed rules for foreign owners of government bonds.

Credit Downgrade

The Indian rupee on Thursday weakened past 69 to the dollar for the first time, slumping to an all-time low amid a spike in crude oil prices, foreign capital outflows and a widening current account deficit.

Last week rating agency Standard & Poor’s cut the country’s credit rating outlook to “negative”.

Asia’s third-largest economy is battling inflation and a widening current account deficit stoked by high oil prices. This, in turn, is adding to selling pressure on the Indian currency.

India’s troubles began long ago so Trump is not to blame for the entire slide. However, Trump put another long on the fire with his policies in Iran.

For discussion, please see Trump to India: No Waiver on Iran Business.

Mike “Mish” Shedlock

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June 28th, 2018

Posted In: Mish Talk

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