On Wednesday, June 26, 2013, the Indian rupee has hit an all-time low against the US dollar and it is now at 60 per dollar. By Wednesday afternoon, the Indian rupee was trading at 60.62 to the dollar, compared to the 59.66 in late Asian trade on Tuesday, June 25, 2013.
After the news of the Indian rupee falling below 60 spread, even the stocks tumbled down. Kishor Ostwal, chairman and managing director of Mumbai-based brokerage CNI Research Ltd., said, “The wild swing in currency is adding to weakness in markets, which is already seeing selling by foreign investors”. According to currency dealers, the decline in the Indian rupee was partly due to big demand for dollars from oil companies.
The oil companies usually pay their import bills at the end of the month. Dealers also said that foreign investors have also been selling Indian debt. Since the beginning of May 2013, the Indian rupee has weakened by more than 11%, as global investors have rushed into the assets dominated by the dollar.
This has happened on expectations that the US Federal Reserve will soon roll back a huge stimulus program, which has injected billions of dollars into the global financial system.