Rupee hits 65.45 as emerging market stocks and currencies pounded

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 Rupee in a freefall as emerging market stocks pounded
It's all about what the Fed (US Central Bank) says and does these days. The rupee fell against the dollar in morning trades after minutes from the Federal Reserve's July policy meeting confirmed that there could be a near-term tapering of stimulus in the US. The currency hit a low of 65.45 against the dollar, a drop of a staggering 134 paise from Wednesday's close.

Tapering of stimulus or QE3 in the US as it is popularly known tantamounts to less liquidity in the global financial system, which tends to impact global markets, particularly emerging market stocks and currencies.

By tapering-off QE3 the Fed would pump less money into the US economy, against the current $85 billion it is pumping. A lot of this money finds its way into global markets.

All of the emerging market currencies and stock markets have fallen on fears that the QE tapering in the US was near. The Philipines benchmark indices was down more then 6 per cent, while Indonesia's Jakarta Composite was down 2.28 per cent. The Indonesian rupiah fell 1.76 per cent to the dollar and was trading at 10,965. Also read Indian markets will dance to the QE3 tune

The Philipines Peso was down 0.85 per cent against the US dollar. All of the Asian markets were trading deeply in the red including Singapore's Strait Times and the KLSE Composite. Check currency rates here

Read more about: dollar
Story first published: Thursday, August 22, 2013, 11:36 [IST]
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