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Continuing weakening streak rupee today breached 58-mark during the trade. It touched all time low of 58.03 per dollar at 3.50 pm today. Currently at 4.29 pm it has recovered and trading at Rs 57.92 per dollar.
Rupee from past few days is volatile and facing pressure downwards due to heavy demand for US dollars. It has depreciated by more than 5.5% since May.
“The major reason that we foresee behind rupee depreciation is the rise in US treasury yield, which is leading to the unwinding of carry trade in USDINR” said Abhishek Goenka, CEO and founder, India Forex Advisors. “The unwinding moves are very brutal and fast that’s what we are seeing in rupee” he added.
Another reason for the free fall of the rupee is heavy outflows from debt markets. “India is not alone to face the heavy outflows; all the emerging nations are facing huge outflows from the debt markets” Goenka said.
