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Dismal run- Indian rupee is the worst performing global currency

By Religare

After a dismal run last year, the rupee's woes have deepened in 2012with the Indian currency recording the biggest fall against the USdollar in the past one month when compared to other major globalcurrencies as a worsening domestic and global economic outlook sappedthe demand for the Indian currency, spurring safe haven demand for thegreenback.

The Indian rupee fell to 55.16 against the US dollar on November 16from the 52.88 mark seen a month earlier, posting a drop of more than4.2 per cent in the past month against the greenback, the largest fallamong 25 leading currencies across Asia, Americas, Europe, Middle Eastand Africa.


Deepening concerns over India's slowing economic growth, a worseningcurrent account and fiscal deficit has driven investors away from theIndian rupee.

At the same time, a worsening global economy amid the deepening debtcrises in Europe and the looming US fiscal cliff have dampened thedemand for risky assets, spurring safe haven appeal of the greenback,taking a further toll on the Indian rupee.

The rupee fell to a record low of 57.12 against the US dollar on June 22, 2012.

"Recent economic data like exports, imports, balance of payments anddeficit has been bad. There also have been intermittent withdrawals bythe FIIs in the stock market".

"The recent worries over US economy have also not helped the rupee'scause. A combination of these factors has dragged down our currency,"Dhanlaxmi Bank Executive Vice-President (Treasury) Srinivasa Raghavansaid.

In Asia, after the rupee, the Japanese yen has been the worstperformer in the past one month, falling by 2.9 per cent against theUS dollar, followed by the Singaporean dollar and the MalaysianRinggit which have depreciated by 0.66 per cent and 0.60 per cent,respectively.

The euro has depreciated by 2.78 per cent against the US dollar in thepast month.

Story first published: Monday, November 19, 2012, 11:30 [IST]
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