Indian rupee hits record low amid inflation
Currency weakened past 69 rupees to the dollar, making it one of the worst performers in Asia for the first time.
The Indian rupee on Thursday weakened past 69 to the dollar for the first time, slumping to an all-time low amid a spike in crude oil prices, foreign capital outflows and a widening current account deficit.
Last November, Standard & Poor rated India as "BBB-minus", which is the lowest investment-grade rating.
Asia's third-largest economy is battling inflation and a widening current account deficit stoked by high oil prices. This, in turn, is adding to selling pressure on the Indian currency.
Current account deficit is a measurement of a country's trade where the value of its imports exceeds the value of its exports.
"The Reserve Bank of India [the country's central bank] will have to intervene for macroeconomic reasons and for political reasons as the opposition is bound to attack the government over the rupee's record low," he added.
DYI: Why have I posted India’s woes? Simply to illustrate that the American Dollar
despite our many problems is significantly less than all of the other countries
continuing America’s role as the world’s reserve currency. There are a handful of countries ratings that
are higher than the U.S. but are way too small to displace the almighty
buck. Of course there always will be
pressure to throw off the shackles of the American petrol dollar. I’ve reported many times Russia and China –
despite their adversarial relationship [pragmatic politics] – to move to a gold
trading scheme for natural resources. If
successful will put pressure on the American Dollar, however that will take a long
time before knocking the U.S. off its perch as the world’s reserve currency.
DYI
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