INR falls to an all-time low against USD

India News Bulletin Desk
Indian rupee plummets to record low against USD
Indian rupee plummets to record low against USD
Image: Wikimedia Commons

Indian rupee plummeted to a record low against the US dollar hitting 59.93, reacting to the announcement by the US Federal Reserve that it will scale back its monetary stimulus. Worldwide stock markets ended low on Thursday and Friday following the Federal Reserve’s pull-back strategy.

The rupee recovered to 59.38 from 59.93 as the day progressed but it was still lower than its earlier all-time low. Previously, the rupee had hit its all-time low of 57.32 in June 2012.

On Wednesday, the rupee closed at 58.72. But on Thursday, it sank by 1.9% against the dollar, its biggest fall since September 2011.

The rupee has already been under pressure because of a slowdown in India’s economic growth, global deficit, high inflation and uncertain economic conditions.

It has fallen more than 15% against the US dollar since October last year.

But Federal chairman Ben Bernanke’s US deficit strategy also affected gold prices.

On Friday, gold futures hit their lowest level in more than a fortnight. It traded at Rs. 26,827 per 10 grams.

In global markets too, gold fell to a three-year low after Federal Reserve’s announcement. Spot gold was down nearly 9% showing a drop for the fifth consecutive session.

The depreciating rupee had an adverse effect on India’s current-account deficit. The deficit hit an all-time high of 6.7% for the October-December quarter, spiking the country's import bill.

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