Tumbling Indian rupee risks breaching 20 per dirham
The Indian rupee continued its relentless tumble, dropping to as low as 19.09 per dirham (70.08 per dollar), spurring increased remittances to their home country by NRIs on Tuesday.
Fears over a rise in global protectionist measures, along with a strong US economy dragged Asia's "worst-performing currency of the year" to a fresh intraday low before recovering by a fraction at Rs69.98.
The rupee has lost 8.6 per cent so far this year. The currency woes come against the backdrop of an economy that's growing faster than any other major nation.
Some currency experts are even predicting that the rupee would slide to 80 per dollar, or Rs21.8 per dirham in the coming months.
Peter Brandt, a widely-followed chartist and the CEO of Factor LLC, believes the worst is not over for the rupee and sees the Indian unit falling to 80 per dollar level if it breaches the crucial level of 71 (Dh19.34).
"Technically, should the rupee climb above 71, then we see the rupee going to 80 within four to six months. There could be a 10-15 per cent run on the rupee," he was quoted as saying.
Sudhesh Giriyan, COO, Xpress Money, said one of the main factors for this decline is the weakening of the Turkish lira, due to the turmoil faced by the country, which has put the emerging market currencies under pressure.
"There are other concerns like the widening trade deficit of India that continues to put pressure on the foreign exchange reserves of the country. The Indian rupee is presently trading at the 19 mark, against the dirham, and is most likely to weaken further in the coming months," Giriyan told Khaleej Times.
"Remittances to India have continuously been on the rise since the start of 2018. The current rupee decline is having a positive impact on the volume of remittances to the country as NRIs are using this to their advantage to send larger amounts of money back home," he said.
Earlier this month, the RBI raised rates to the highest in two years.