Skip to main content

rupee fall the most in 18 years

Rupee falls the most in 18 years, breaches 66/$

Wednesday, Aug 28, 2013, 7:11 IST | Place: Mumbai | Agency: DNA

The rupee plunged to a fresh all-time low on Tuesday as foreign investors pressed sell on fears that the passage of the Food Security Bill in Parliament on Monday would lead to the country overshooting its fiscal deficit target, leading to a sovereign rating downgrade.

The local currency fell to 66.30 per dollar levels in latter part of the trade to close the session at 66.24 to a dollar – down a whopping 194 paise from the previous close.

This was the biggest single-day drop seen since October 1995, according to data from Reuters.

“Investors concluded that this step will lead to a rise in fiscal deficit in future,” said Abhishek Goenka, founder & CEO at India Forex Advisors.

Foreign exchange dealers said trade was one-sided on Tuesday with most dollar demand coming from foreign banks that act as custodians of foreign institutional investors (FIIs).

As per data from BSE, FIIs net-sold Rs1,373 crore from Indian equity markets on the day.

Interventions by the Reserve Bank of India in the spot foreign exchange market were not enough to meet the huge dollar demand.

So far in August, the rupee has lost 10% against the greenback, making it the second-worst performer amid emerging markets and Asian currencies. The Indonesian rupiah is leading the fall in those baskets.

Foreign investors are pulling out money amid fears over uncertain policy structure and deteriorating economic conditions in the country and expectations of winding down of the US monetary stimulus, which are putting negative pressure on the rupee, said Sugandha Sachdeva, AVP & in-charge, currency research, Religare Securities.

“Weighing further on the local currency’s woes is the government’s most recent subsidy programme, the Food Security Bill, which could hurt the country’s already weak finances,” said Sachdeva. She expects the rupee to fall to 67.5 per dollar levels in the near term before it could recover some of its lost ground.

This is despite reassurances from finance minister P Chidambaram that the government is committed to meeting the fiscal deficit target of 4.8% for this fiscal. In 2012-13, India’s fiscal deficit was at 4.9% of the gross domestic product.

To be sure, India’s sovereign rating is currently on the verge of slipping below investment grade and international rating agencies have recently warned of possible action in case the government failed to put the house in order.

Popular posts from this blog

Overview of Social Media Marketing

Social media marketing refers to the process of gaining traffic or attention through social media sites. Social media itself is a catch-all term for sites that may provide radically different social actions.

Use social media marketing to listen, analyze, publish, and engage across networks. Align your marketing, customer service, and sales efforts on social — strengthening customer relationships.

Listen and analyze. Hear conversations from over 650 million different sources with social listening tools. Discover what consumers are saying about your brand, your products, and your competitors. Discover trending topics and influential conversations — then use that information to inform your marketing decisions.
Plan and publish. Plan, execute, and track social media marketing campaigns. Customize and craft your content from multiple sources, while protecting your brand with configurable approval rules and a full audit trail. Manage social strategy, tailor campaigns, and drive social awareness…

Future Of Digital Marketing

The Origin of Digital-Marketing: The term 'digital marketing' was first used in the 1990s. In the 2000s and the 2010s, digital marketing became more sophisticated as an effective way to create a relationship with the consumer that has depth and
While the term 'digital marketing' may not have been used until the 1990s, digital marketing itself has roots to the mid-1980s when the Soft Ad Group, now ChannelNet developed advertising campaigns for several major automobile companies, wherein people would send in reader reply cards found in magazines and receive in return floppy disks that contained multimedia content promoting various cars and offering free test drives.
The rapid evolution of digital media has created new opportunities and avenues for advertising and marketing. Fueled by the proliferation of devices to access digital media, this has led to the exponential growth of digital advertising.
In 2012 and 2013 statistics showed digital marketing remained a gro…

Why Digital Marketing and Web 2.0 Important To Business?


Digital marketing technology helps you understand and reach your audience most effectively so you can generate the most revenue.  For advertising campaigns, ad serving technology makes it possible to serve the right ad at the right time to right person.  That means your advertising is being as productive as possible. When technology is working for you, you’ll understand your audience at a whole new level, and it will show up on your bottom-line.

NEED FOR THE STUDY The pace of change in today’s business environment is faster than ever. New markets, technologies, and opportunities are arising on a daily basis. Current ways of doing business need to be adapted or they will become outdated. Organizations and enterprises have to become agents of evolution to be successful; as victims of evolution they risk failure. With so many dynamics operating in the global economy, Digital Marketing is now more than ever an effective tool to make a company stand out from the pack.

The pe…