Indian rupee breaches 72 to the dollar to hit new low

The Indian rupee has fallen nearly 2 percent this month and more than 12 percent this year. (AP)
Updated 06 September 2018

Indian rupee breaches 72 to the dollar to hit new low

MUMBAI: The Indian rupee breached the 72 to the dollar mark for the first time on Thursday, extending losses as a rout in emerging markets kept investors on edge.
The rupee fell to a record low of 72.11 to the dollar at one point, but pared the day’s losses after mild selling of dollars likely by the Reserve Bank of India, dealers said.
At 0829 GMT, the rupee was trading at 71.9350 to the dollar compared with its previous close of 71.7750.
“This is not intervention, it is just mild selling (of dollars) to smoothen out the volatility and not to protect any level anymore,” said a senior forex analyst at a state-run bank.
The rupee has fallen nearly 2 percent this month and more than 12 percent this year, making it Asia’s worst performing currency.
Dealers estimate the RBI on Thursday to have sold about $1 billion, which they said is not much given the pace of the rupee’s fall.
The RBI anonymously intervenes in the forex market through banks, and publishes its forex reserves numbers with a week’s time lag. Typically, traders can only estimate the intervention number from the weekly data.
While the sharp fall in the rupee and the RBI’s light-handed approach in the forex market have surprised several traders, government officials have not shown much concern about the currency’s rapid depreciation.
Finance Minister Arun Jaitley said late on Wednesday there was no need for a panicked reaction to the rupee’s fall while the commerce secretary, Anup Wadhawan, said the slide was due to global developments and was helping India’s exports, which rose 14.32 percent in July to $25.77 billion from a year earlier.
“It is quite puzzling to the markets what the government and RBI want on the rupee, and why the government is sending out such signals that they are not worried about the rupee,” said a forex trader at a state-run bank.
The next Fibonacci technical level for the rupee will be 72.50-72.80 to the dollar, the forex analyst said.


Africa development bank says risks to continent’s growth ‘increasing by the day’

Updated 18 August 2019

Africa development bank says risks to continent’s growth ‘increasing by the day’

  • The trade dispute between US and China has roiled global markets and unnerved investors
  • African nations need to boost trade with each other to cushion the impact of external shocks

DAR ES SALAAM: The US-China trade war and uncertainty over Brexit pose risks to Africa’s economic prospects that are “increasing by the day,” the head of the African Development Bank (AfDB) told Reuters.
The trade dispute between the world’s two largest economies has roiled global markets and unnerved investors as it stretches into its second year with no end in sight.
Britain, meanwhile, appears to be on course to leave the European Union on Oct. 31 without a transition deal, which economists fear could severely disrupt trade flows.
Akinwumi Adesina, president of the AfDB, said the bank could review its economic growth projection for Africa — of 4 percent in 2019 and 4.1 percent in 2020 — if global external shocks accelerate.
“We normally revise this depending on global external shocks that could slowdown global growth and these issues are increasing by the day,” Adesina told Reuters late on Saturday on the sidelines of the Southern African Development Community meeting in Tanzania’s commercial capital Dar es Salaam.
“You have Brexit, you also have the recent challenges between Pakistan and India that have flared off there, plus you have the trade war between the United States and China. All these things can combine to slow global growth, with implications for African countries.”
The bank chief said African nations need to boost trade with each other and add value to agricultural produce to cushion the impact of external shocks.
“I think the trade war has significantly impacted economic growth prospects in China and therefore import demand from China has fallen significantly and so demand for products and raw materials from Africa will only fall even further,” he said.
“It will also have another effect with regard to China’s own outward-bound investments on the continent,” he added, saying these could also affect official development assistance.
Adesina said a continental free-trade zone launched last month, the African Continental Free Trade Area, could help speed up economic growth and development, but African nations needed to remove non-tariff barriers to boost trade.
“The countries that have always been facing lower volatilities have always been the ones that do a lot more in terms of regional trade and do not rely on exports of raw materials,” Adesina said.
“The challenges cannot be solved unless all the barriers come down. Free mobility of labor, free mobility of capital and free mobility of people.”