Indian Rupee's tumble not surprising, says Sue Trinh

While another Sue Trinh, head of Asia FX strategy at RBC Capital Markets was quoted by Bloomberg as saying that INR tumble is unsurprising and is not a sign of panic as losses are due largely to stronger dollar.

INR has performed relatively well within the region with memories of the October 2013 taper tantrum well behind it. Photo: Zeebiz Webdesk

Indian Rupee (INR) hit a record low during Thursday’s trading session to reach 68.910 to a US dollar. This is the lowest point for INR since August 2013.

At 1.53 pm, rupee is trading at 68.821 down by 0.010 paisa or 0.01%.

Khoon Goh, head of Asia research at ANZ told Bloomberg, “ INR’s fall mainly reflects broad-based dollar strength. Rupee’s losses are in the middle of the pack relative to other Asian currencies.”

On Thursday, dollar index was trading at 101.90 up by 0.17%. It also touched a new high of 102.11 against global currencies.

While another Sue Trinh, head of Asia FX strategy at RBC Capital Markets was quoted by Bloomberg as saying that INR tumble is unsurprising and is not a sign of panic as losses are due largely to stronger dollar.

She said, "INR has performed relatively well within the region with memories of the October 2013 taper tantrum well behind it."

Adding, Trinh explained, "India’s economy is much better insulated to Fed tightening. Also the associated volatility with external vulnerability indicators are much improved, including ratio of FX reserves to short-term debt, balance of payments surplus, favorable funding mix, 3-year low in external debt."

RBC has maintained long-standing forecast for USD/INR to rise to 73 by end-2017.

Since the time of US election against dollar, the rupee has tumbled by 3.44%. While in 2013, it dropped by 11% against dollar.

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