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Indian rupee hits lowest level of 2021, touches 20.16 vs UAE dirham

Dubai - It was reportedly the biggest drop of the Asian currency since March last year.

The Indian rupee hit an all-time low of 2021 on Friday, reaching 20.16 against the UAE dirham in line with selloff witnessed in the equity markets amidst rising US Treasury yields and rising oil prices.

The rupee dropped from a 19.68 on Thursday to 20.16 on Friday, losing 2.45 per cent of its value, according to xe.com.

It was reportedly the biggest drop of the Asian currency since March last year. The rupee is down 1.4 per cent year-to-date against the UAE currency.

IIFL Securities said month-end dollar demand and rising crude oil prices are likely to keep the Indian rupee under pressure against the dollar. Besides, surging US Treasury yields also weighed down the local unit. The currency is also likely to be under pressure as domestic equities are seen opening deep in red owing to an overnight drop on Wall Street as a rapid rise in bond yields rattled investor sentiment,” it said in a note on Friday.

Lombard Odier had said in a note in December that the country’s central bank – the Reserve Bank of India – will be somewhat less aggressive in foreign exchange market intervention as domestic growth and inflation stabilise.

Bombay Stock Exchange index fell 1,939 points, or 3.8 per cent, to 49,099.99 points on Friday due to global selloff in the equity markets, wipiung out 5.37 trillion rupee from the BSE’s market capitalization.

"Global signals today are extremely negative against the backdrop of a massive jump in 10-year bond yields in the US. We can see a downtrend and it will be negative for the market," said Gaurav Garg, Head of Research at CapitalVia Global Research.

-waheedabbas@khaleejtimes.com