Currency News:Ruppe Trades Lower Against USD

Currency News

Currency News

The rupee, or more specifically the Indian rupee is the official currency of the Republic of India. The issuance of the currency is controlled by the Reserve Bank of India.

For a fifth straight session the Indian currency has dropped 11 paise to 66.84 against the US dollar in early trade on Tuesday, tracking weak trend in Asian currencies. The currency had closed at 66.73 against the dollar in the previous session on firm dollar demand from importers.

The Chinese trade data released on Tuesday has raised fresh fears over the slowdown in the world’s second largest economy, at a time, when the US Fed looks all set to raise interest rate, in a first in nearly seven years, in its forthcoming December 15-16 policy meet.

Data showed the Chinese trade surplus shrank to yuan 343 billion, with exports falling 3.7 per cent YoY in November. Imports too fell 5.6 per cent YoY for the month. This was fifth consecutive month of fall in exports and thirteenth straight month of deceleration in imports.

Weakness in China does not only impact the Chinese equity market but also raise chances of foreign outflows from emerging markets (EMs) like ours. This impact EM currencies as well.

Data available with NSDL showed that foreign investors have sold equities to the tune of Rs 4,166 crore in December. The domestic debt market too has seen selling since November 1.

On Tuesday, the yuan inched 0.07 per cent lower to 6.41 against the greenback. Malaysian ringgit tanked 1 per cent. Korean won fell 0.49 per cent, while Indonesian rupiah edged 0.04 per cent lower.

Already hopes of rate hike in the forthcoming Fed meet have strengthened the dollar against a basket of major world currencies. Divergence in monetary policies too are fuelling rally on the dollar.

Dollar index, which tracks the movement of dollar against a basket of six major world currencies, stood at 98.59.

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