Markets

‘Not anxious about rupee if other currencies depreciate’

‘Not anxious about rupee if other currencies depreciate’

The rupee, however, recovered from the all-time low of 69.91 and strengthened by 23 paise to 69.68 against the USA dollar in opening trade at the interbank foreign exchange market today. Traders are now anxious over the Turkish crisis spreading its impact over the world economy. The unit is down about a fifth against the greenback since Friday.

"Even if the rupee falls to 80, it will not be a concern provided other currencies also depreciate", Garg told reporters when asked about the currency's impact on the Indian economy.

The crisis has been sparked by a series of issues including a faltering economy - the central bank has defied market calls for rate hikes - and tensions with the United States, which has hit Turkey with sanctions over its detention of an American pastor.

"Over the near term, trend of USD/INR will be dictated by Turkish lira and Euro/USD".

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The rupee has been among the worst performing currencies against the dollar compared with its peers so far this year. The home currency opened at 69.84 and touched a high of 69.75 a dollar.

India's retail inflation dropped to a nine-month low of 4.17% in July from 4.92% a month ago on the back of softening food prices and a favourable base. The recent increase in inflation has led the Reserve Bank of India (RBI) to increase the repo rate by 25 basis points twice in two months. The next bi-monthly policy is to be unveiled on October 5.

Sudhesh Giriyan, COO, Xpress Money, said one of the main factors for this decline is the weakening of the Turkish lira, due to the turmoil faced by the country, which has put the emerging market currencies under pressure.

With the rupee recuperating from initial loss, the benchmark Sensex recovered by almost 185 points to 37,829.93 in early trade.