RTTN:Indian Rupee Tumbles To New Record Low Against U.S. Dollar
The Indian rupee extended its free-fall against the U.S. dollar in the afternoon deals on Wednesday, as the latest efforts taken by the Reserve Bank of India to address the rupee volatility failed to convince the market.
The rupee reached an all-time low of 64.60 against the greenback, breaching the previous record low and the key 64.00 level for the second consecutive day. The rupee has thus slumped almost 1.9 percent from Tuesday's closing value of 63.365.
The RBI on Tuesday intervened in the foreign exchange market after the Indian currency had fallen below the key 64.00 mark.
The central bank also announced yesterday that it would conduct open market purchase operations (OMOs) of long-dated government bonds of INR 80 billion on August 23, and "thereafter calibrate them both in terms of quantum and frequency, as may be warranted by the evolving market conditions."
Besides, the Reserve Bank relaxed the rules pertaining to the statutory liquidity ratio requirements in order to help banks protect their bond portfolios from large mark-to-market losses.
The banks can retain their statutory liquidity ratio (SLR) holdings in held-to-maturity (HTM) category at 24.5 percent until further instructions, the central bank said.
Market concerns about a possible tapering of U.S. stimulus measures has also led to sharp slide of the Indian rupee in the past few days.
The minutes of FOMC meeting, which will be released later in the global day, is expected to give some clues regarding the timing of tapering of $85 billion per month asset purchase program.
