![](https://theuniqueacademy.co.in/news/upload/current_affairs.jpg)
Rupee weakens to new closing low of 69.05
Why in the news ?
· The rupee on Thursday plunged by 43 paise and closed below the 69 level for the first time at a historic low of 69.05 as the US currency rose to a one-year high level against global currencies.
More on news
- The rupee slid 43 paise to close at 69.05 on a day when most Asian currencies weakened against the dollar.
- The previous all time closing low was on July 5, when it ended at 68.95.
- The rupee had hit 69.09 intraday on June 28, its lowest ever, before recovering on suspected RBI intervention.
Possible Causes
- The dollar rose to a oneyear high against a basket of currencies as investors raised bets on the currency in the wake of upbeat comments on the U.S. economy by Fed Chairman
- A notrust motion moved by opposition parties against the NDA government also weighed on the rupee and stocks.
- The market mood somewhat worsened after China stepped up its game against the US and the People’s Bank of China devalued the Yuan once again in what many see as a move against the US.
- Most Asian currencies also dropped against the dollar as concerns over a tariff war between the US and China endured, keeping investors cautious on regional trades.
Impact
- According to India Rating, the importers could face challenges in passing on the dual impact of high input costs and weak rupee to their customers.
- In addition, foreign currency borrowers with large unhedged positions are likely to be worst affected by the weakening of rupee.
Source
The Hindu, Indian