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Rupee tumbles against dollar on Wednesday

02 Sep 2020 Evaluate

Indian rupee depreciated significantly against dollar on Wednesday, on account of sustained dollar demand from importers and banks. Anxiety remained among traders as Moody's Investors Service stated that India will be among the large emerging market sovereigns to have highest debt burden by 2021. It stated that the coronavirus pandemic-induced deterioration in growth and fiscal dynamics will leave most large emerging market sovereigns with higher debt burdens over the next few years. Traders also remain concerned as State Bank of India's (SBI) research report - Ecowrap has said that India’s real Gross domestic product (GDP) is expected to shrink by 10.9 percent in the current fiscal year (FY21). On the global front; emerging market currencies eased on Wednesday as dollar bounced from two-year lows on signs of a global economic rebound, with the Russian rouble among the biggest decliners ahead of treasury bond auctions. The rouble fell to 74.00 a dollar, close to a one-week low of 75.99 as investors also awaited Russia's foreign currency plan.

Finally, the rupee ended at 73.03, 16 paise weaker from its previous close of 72.87 on Tuesday. The currency touched a high and low of 73.13 and 72 .90 respectively. The reference rate for the dollar stood at 72.82 and for Euro stood 87.30 on September 01, 2020. While the reference rate for the Yen stood at 68.92, the reference rate for the Great Britain Pound (GBP) stood at 97.68.

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