Rupee set to trigger rush in remittance

> FROM PAGE 25 “The demand for goods and services in major sectors has also taken a hit due to demonetisation. Taking all these factors into consideration we feel that a new low of around 25-30 paisa below the earlier low of 68.86 against the US dollar is possible.”

He said currencies and markets are moving on the strong indication from the US Fed on hiking their rate. “Most of the major currencies including the euro, Canadian dollar, Swiss franc and Singapore dollar are at the lowest level in medium term. The Asian currencies have taken a greater hit and slid substantially, with some of them at their lowest level since 2008.”

Analysts said the rupee’s previous record low came in 2013 after the Fed’s signal to end its unprecedented bond purchases spurred an exodus from emerging markets like India.

Its slide this year has tripped fewer alarms as Asia’s third-largest economy has since been overhauled, with policy makers succeeding in narrowing the current-account deficit, slowing inflation and building a war chest of foreign-exchange reserves.

“The rupee’s drop to a record low is much less worrisome this time as it is largely because of the dollar’s strength. Once the global uncertainties disappear, investors will return to India much faster,” a currency expert said.

On Thursday, the S&P BSE Sensex index of Indian shares slid 0.7 per cent, halting a twoday gain.

Foreign holdings of Indian government and corporate bonds have dropped by ₹97.2 billion ($1.4 billion) in November, set for the biggest decline since April 2014, National Securities Depository data compiled by Bloomberg show. Overseas investors have withdrawn a net $1.7 billion from Indian stocks.