Indian rupee drops to 1-month low against UAE dirham
The rupee was at 82.30 to the US dollar by 8am, down from 81.79
Dubai: In good news for expats planning to remit money, the Indian rupee dropped to its lowest level in a month on Tuesday.
The rupee fell below 82 to the US currency for the first time in over a month on Tuesday, likely due to stop losses and dividend payment-related outflows. At 10.30am in the UAE, one dirham was equivalent to INR 22.39. You can keep track of the latest currency rates here.
The drop in the rupee's value has been linked to speculation of a spike in US federal rates this week, which led to Asian stocks slipping on Tuesday. The rupee has in the last two sessions declined despite a host of positive cues.
This is part of the market reaction to unexpectedly strong reports from the US economy. While a better economic performance is considered good for the broader economy, the strong reports mean that the Federal Reserve will have to fight harder to bring down inflationary pressure with more hikes in interest rates.
“Inflation will likely prove to be stickier and with the service part of the economy refusing to weaken. The risks that the Fed might need to do more remain elevated," Edward Moya of Oanda said in a statement to AP.
India's economy is expected to grow 6.9 per cent in the current fiscal year, the World Bank said in a report on Tuesday, citing tightening monetary policy and high commodity prices as factors impacting the country's growth.
The report sees average retail inflation at 7.1 this year.
- Inputs from agencies