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Re hits 2-year low of 48.24 against dollar, may sink further NEW DELHI/MUMBAI: Unlike 2008, when policymakers were relieved by the fall in the rupee, this time they appear to be a worried lot. After all, choose any measure and the Indian currency has seen amongst the highest value erosion over the last 12 months. So far in 2011, it is the worst performer among 10 key Asian currencies. On Tuesday afternoon, the Indian currency hit a fresh two-year low of 48.24 against the dollar, a level last seen on September 25, 2009. Later in the day it gained to close 48.06 as dollar inflows were reported. All indicators point to a further decline in its value against the dollar although not to the extent witnessed in the last few weeks. If trends in the forwards market are anything to go by, traders are betting on the rupee closing in on the 50 mark against the dollar in 12 months. According to Bloomberg data, in the non-deliverable forwards market, a year from now, traders expect it to trade around 49.67 to a dollar. While the world can certainly change in a year, over the next three months too, further decline is expected though it would not be as steep as the 6% decrease seen in the last three months. If currency futures are an indication, then market players expect the value of the rupee to fall marginally to 48.42 against the dollar by the end of November. In the NDF market too, the expectation is that the rupee could be trading around 48.70 to a dollar. In fact during the day, traders kept betting on further decrease in the value of the rupee. Back |
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