The Indian rupee fell to 65.81 on Friday amid fears of a
currency war after China's depreciation of its yuan. This is lowest
value of the rupee since September 6, 2013, when it had hit
66.29/dollar.
This takes the rupee's fall close to 3 per cent when China depreciated its currency on August 11, sparking fears of competitive devaluation by different countries amid concerns about global growth.
The rupee had closed at 65.54 on Thursday.
Reserve Bank of India Governor on Thursday Raghuram Rajan had warned of risks from yuan devaluation. Dr Rajan said China's devaluation of the yuan was not a concern, but warned of the dangers of "tit-for-tat" actions by other countries if the move was part of a long-term competitive devaluation.
"I think if the Chinese depreciation holds to about this level, it's not something that one should be overly concerned about," Rajan said at a banking event in Mumbai. "If it's part of a process of getting competitive advantage through ... longer term depreciation it has to be worrisome across the world, partly because you could have tit-for-tat actions," he added.
Michael Every, Head of Financial Markets Research for Asia-Pacific at Rabobank, said that Indian economy's relative outperformance may help it better weather the global currency storm. But the rupee could remain under pressure amid global worries, he added. (With Agency Inputs)
This takes the rupee's fall close to 3 per cent when China depreciated its currency on August 11, sparking fears of competitive devaluation by different countries amid concerns about global growth.
The rupee had closed at 65.54 on Thursday.
Reserve Bank of India Governor on Thursday Raghuram Rajan had warned of risks from yuan devaluation. Dr Rajan said China's devaluation of the yuan was not a concern, but warned of the dangers of "tit-for-tat" actions by other countries if the move was part of a long-term competitive devaluation.
"I think if the Chinese depreciation holds to about this level, it's not something that one should be overly concerned about," Rajan said at a banking event in Mumbai. "If it's part of a process of getting competitive advantage through ... longer term depreciation it has to be worrisome across the world, partly because you could have tit-for-tat actions," he added.
Michael Every, Head of Financial Markets Research for Asia-Pacific at Rabobank, said that Indian economy's relative outperformance may help it better weather the global currency storm. But the rupee could remain under pressure amid global worries, he added. (With Agency Inputs)
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