The Indian rupee has slipped to 66.76 per dollar on Thursday December 3. The sharp rise in the dollar index and continued weakness in the euro, which the rupee closely tracks, could lead to further depreciation in the rupee, traders say.
The rupee last traded below 67 per dollar in September 2013, when Reserve Bank Governor Raghuram Rajan took charge of the central bank amid a crisis-like situation. Days before Dr Rajan became RBI Governor, the rupee crashed to a record low of 68.85 per dollar, weighed down by weak economic growth, a record high current account deficit and high fiscal deficit.
The renewed weakness in the rupee has come from external factors, in particular from the US, where the Federal Reserve is likely to raise rates for the first time in a decade.
Since the start of 2015, the rupee has lost 5.35 per cent against the dollar, according to Edelweiss. Most of the weakness in rupee has come since August, when foreign investors started selling in equities and debt markets aggressively.
According to Jamal Mecklai, the Indian currency can weaken by another rupee to 68/dollar amid ongoing weakness.
However, Dr Rajan is expected to intervene in forex markets to prevent the rupee from sliding quickly, analysts opine.
