1 Raani = 100 Gandhi

[Mehtab Singh]

The rupee hit a fresh trough below the 100 level against the British pound, on Friday, even as the markets remain focussed on the Indian currency hitting a record low of sub Rs. 64-level against the U.S. dollar.

The rupee hit a new low of 100.35 against the British pound (GBP) early Tuesday morning, as weak domestic fundamentals including ballooning current account deficit weighed down on the Indian currency.

After a modest recovery from its bottom, rupee was seen trading at 99.7 against the British pound by mid-day trade.

The rupee has depreciated by about 25 per cent in the past three months, from close to 83 in mid-May, while it was even higher at about 80 against the British Pound in March.

At close to the 100 level, the British pound is the most expensive against the Indian rupee among major foreign currencies across the world, followed by the euro (85), Swiss franc (69), U.S. dollar (63.7), Canadian dollar (61.5), Australian dollar (57.8), New Zealand dollar (50.9) and Singapore dollar (49.8).

Forex dealers said besides strong demand for the American currency from importers and banks, dollars strength against other currencies overseas amid expectation that the Federal Reserve will soon taper its bond-buying programme weighed on the domestic currency.

Continuing plunge in equity markets in view of sustained capital outflows by foreign funds is further adding to the pressure on the rupee.

In order to arrest the rupee slide, RBI last week had announced measures such as restriction on Indian firms investing abroad and on outward remittances by resident Indians, triggering fears of return of capital control regime.

http://www.thehindu.com/business/markets/rupee-slips-below-100level-against-pound/article5041647.ece