Image Credit: Ahmed Ramzan/ Gulf News

Dubai: The Indian rupee plummeted further against the UAE dirham, as the US dollar strengthened on Thursday.

As of 8:31 am, the Asian currency stood at 20.25 against the dirham and 74.4 against the greenback, the lowest in at least ten years, according to the data compiled by Xe.com. Yesterday, the rupee closed at 20.21 against the UAE dirham.

The rupee has been hitting fresh record lows this year due to a stronger American currency and higher crude oil prices. It is considered the worst performing currency among the fast-growing Asian economies, although its peers, the Philippine peso and the Indonesian rupiah, have also fallen in value.

Analysts are expecting the battered rupee to touch 21 against the UAE dirham before the new year rolls around, despite reports that the Reserve Bank of India (RBI) is intervening to stem the currency slide.

“The fall in the [currency] continued as the equity markets in India continued its downward move, following a big slide in global markets,” Vijay Valecha of Century Financial told Gulf News on Thursday.

“This fall came in spite of the news that broke out in the markets that Prime Minister Narendra Modi’s government is considering tapping Indians living abroad to lure foreign exchange flows and prop up the rupee.”

The rupee opened at 74.31 to a dollar at the Inter-Bank Foreign Exchange Market and soon slipped to 74.46 to a greenback – the lowest-ever it has touched according to IANS.  It recovered slightly at around 8:40am, trading at 74.43 against the US dollar.

“We believe the fall in rupee may continue in the coming days, as the RBI plans to infuse 12,000 crore into the system through open market operations on October 11. This move would increase the supply of rupee and thus in-turn cause the rupee to depreciate further,” added Valecha.

The chart shows the performance of the Indian rupee against the UAE dirham over a 10-year period.

Sudhesh Giriyan, COO of Xpress Money had said that with the the emerging market currencies still volatile, the rupee is likely to hit 21 per dirham.

"In spite of the likely intervention by the RBI in terms of injecting liquidity in the market by purchasing government bonds in October, the rupee is likely to fall further and may touch 21 against the UAE dirham by the end of the year,” Giriyan said.