The rupee has slumped 2.5% against the dollar so far in April after falling 0.1% in the quarter ended March. The rupee weakened past 75 per dollar for the first time in eight months this week. Federal Bank Ltd. expects it to fall further to 76 by year-end. This means the Indian rupee has turned into Asia’s worst-performing currency from being the best in the previous quarter. It will probably see more losses as a resurgence in pandemic cases to a record threatens to hamstring the economy.
The currency’s slide may be exacerbated by unwinding of short dollar positions against the rupee, which ICICI Bank Ltd. estimates has grown to $50 billion.
According to hindustantimes.com, the drop is also weighing on dollar bonds from the nation’s issuers, which have under-performed Asian peers this month, as India overtook Brazil as the second worst-hit nation by the pandemic in the world. Stricter restrictions on movement across the country are reviving memories of last year when extended lockdowns squeezed demand and pushed the economy into its worst contraction in nearly seven decades.
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