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Indian Rupee Falls to All Time Low Versus USD

The Indian rupee dipped to an all-time low against the US dollar after the Federal Reserve signalled that it could start pulling back on its monetary stimulus later this year.

The rupee fell as low as 59.93, down from its Wednesday close of 58.72.

The Fed’s program to pump cash into the economy has caused capital to flow into emerging markets.

Analysts said the slide signalled India’s dependence on those foreign capital inflows.

“It is a classic case of a country’s vulnerability to capital flight because of its current account deficit situation,” said Stuart Oakley, head of Asian currency trading at Nomura.

India’s current account deficit, which is the difference between inflow and outflow of foreign currency, hit a record high of 6.7% of its gross domestic product (GDP) in the October to December quarter.

via BBC [1]

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Alfonso Esparza

Alfonso Esparza [6]

Senior Currency Analyst at Market Pulse [7]
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza