Rupee hits record low of 65 to the dollar on Fed Minutes

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Rupee hits record low of 65 to the dollar on Fed Minutes
The rupee fell against the dollar in early morning trade 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 rupee was trading at 64.96 against the dollar, after hitting the 65 levels . The rupee had fallen almost 2 per cent yesterday to a record low of 64.54 against the dollar, before recovering to close at 64.12.

The Fed Minutes did not provide any indication on when the Fed would taper its bond buying programme, but did agree on tapering this year. QE Tapering fears sent most of the emerging market currencies including the South African Rand and the Indonesian Rupiah lower against the US dollar.

The drop was despite RBI measures announced late on Tuesday, which helped cool bond prices, but did not provide any respite to the rupee.

Dealers say that the patchwork by the RBI and the government is unlikely to provide any respite to the rupee, as fundamentals for recovery of the rupee remain weak. They point to the high current account deficit, which had lingered on for moths, being one of the prime reasons for the crisis.

To compound worries fears of QE3 tapering has only accelerated the fall. For currency rate click here

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