New Delhi, Sept 12: The rupee downslide continues unabated, as the Indian currency plunged to a new record-low on Wednesday, valuing 72.88 against the US dollar. The fresh decline comes a day after the Centre reportedly asked the Reserve Bank of India to "intervene aggressively" to prevent further devaluation.
On Tuesday, the rupee closed at 72.70 versus the dollar, triggering alarm bells among overseas traders, particularly the importers, who may suffer losses while paying their short-term bills.
According to Soumya Kanti Ghosh, Chief Economic Advisor of the SBI, the burden of short-term debts on India may escalate by Rs 68,500 crore if the rupee averages at 76 against the US dollar by the year-end.
Indian Rupee falls to 72.88 versus the US dollar. pic.twitter.com/Xu0GGFiaJr
— ANI (@ANI) September 12, 2018
Indian rupee has sunk by 11.6 per cent this year between January to August, making it the worst performing currency in Asia. The downfall was triggered by the strengthening of the dollar, owing to the conservative trade policies of United States president Donald Trump.
The devaluation of rupee is expected to further contribute towards the widening of the current account deficit -- which is at a five-year high.
The RBI, which is mandated to maintain macroeconomic stability, had sold-off foreign currencies worth $5.8 billion in May and $6.18 billion in June, in a bid to strengthen the rupee. The central bank is reportedly considering to off new deposits schemes for non-resident Indians.