The rupee crossed ₹81.50, decreasing its value further against a dollar on Monday. The dollar sharply rose towards an all-time high against major currencies as the key lending rates are on a rising streak worldwide.
Rupee Crosses ₹81.50, Recorded All Time Low Against Dollar
Bloomberg quoted, “the rupee last changed hands at 81.5038 per dollar, after opening at its weakest level of 81.5225 and hitting a record low of 81.5587, compared to its Friday’s close of 80.9900.”
“ The domestic currency fell 38 paisa to an all-time low of 81.47 against the US dollar in early trade,” asserted PTI.
Last week, when the US raised its key lending rates and a strict policy was regulated by the Federal Reserve, other nations were also forced to do so. These developments have triggered a lot of sell-offs in financial markets globally and have sparked the dollar rally.
At the next Scheduled meeting this week, the Reserve Bank of India is all set to hike its key lending rates or repo rates. But the exact stats of how much it will be are unknown. Expectedly this hike will be a major one as the peers of the Central Bank across the globe are not holding back.
“The dollar rally is also a reflection of investors increasing flight-to-safety bets as Asian markets risk experiencing crisis-level stress again, as two of the most significant currencies in the region have collapsed under the assault of unrelenting dollar strength – the yen and the yuan,” mentioned NDTV.
“The renminbi and yen are big anchors, and their weakness risks destabilising currencies to trade and investments in Asia,” said Vishnu Vrathan, From Mizuho Bank, HOD Economics, to Bloomberg.
“We’re already heading toward global financial crisis levels of stress in some aspects; then the next step would be the Asian financial crisis if losses deepen”, further added.
“Currency risk is a bigger threat for Asian nations than interest rates”, told Taimur Baig, Head Economists at Singapore-based DBS Group, to Bloomberg.
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“At the end of the day, all of Asia are exporters, and we could see a reprise of 1997 or 1998 without the massive collateral damage”, further added.
