Indian rupee takes a hit after latest global inflation data, drops to 21.66 against UAE dirham

Indian rupee takes a hit after latest global inflation data, drops to 21.66 against UAE dirham

That was enough to send the US stock markets into a slide, with the key index dropping more than 600 points, and since matched by all the main Asian stocks this morning. India’s BSE Sensex is lower by 404 points, but only after recovering some ground.

It’s been a complete U-turn since yesterday – at one point it seemed that the rupee would keep firming up further. In dollar terms, that meant the possibility of touching 79 to the dollar. The rupee closed yesterday at 79.15 and started today at 79.60.

“The markets are turning jittery – what many though was going to be plain sailing until the Fed meeting next week is not turning out to be one,” said an FX analyst.

The PKR is now at 236.50 against the dollar, and within sight of the lowest point ever of 240 (which was where it was in July). “The devastating floods and the steep cost of construction are being factored into the PKR’s current weakness,” said a FX watcher. “That’s offset the feel-good from the new IMF deal and the other bilateral arrangements Pakistan struck with some of the Gulf states and China.”

The PKR is down 33 per cent in the year-to-date.

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