Concerns as Indian rupee, Turkish lira extend losses

The Indian rupee and the Turkish lira both extended losses yesterday, with the rupee touching an all-time low (70.65) against the dollar. The Indian government yesterday said it was expected to remain in the range of 68 to 70 during the year.

Economic Affairs Secretary Subhash Chandra Garg told the media that the depreciation in the rupee was due to some small mismatch in the demand and supply, which may go either way depending on the view taken by the operators.

He said while foreign portfolio investors took some $9 billion (Dh33.05 billion) from the country during the first three months of the current fiscal, net flow was at an equilibrium in July.

Earlier, after hitting an all-time low 70.65 per dollar, the rupee settled at 70.59 per dollar, depreciating by 49 paise from its previous close of 70.10 per dollar. Turkey’s lira extended losses, down 3.2 per cent to 6.45 to the dollar, a two-week low, concern grew about the effects of the country’s currency crisis, and Finance Minister Berat Albayrak was quoted as saying he did not see a risk to the economy. Dollar-denominated Turkish bank bonds also fell after Moody’s sounded the alarm over the sector.

Overall, emerging markets have clawed back from this month’s sharp sell-off.

“On balance people are looking to buy EM assets but it would be foolish to say buy them all because there are still vulnerabilities in a sizeable number,” Aberdeen Standard’s Milligan said.