RUPEE HITS LIFETIME LOW

The rupee collapsed to a lifetime low of 68.85 against the dollar and closed at 68.80, registering its biggest single-day loss of 256 paise

The rupee today collapsed to a lifetime low of 68.85 against the dollar and closed at 68.80, registering its biggest single-day loss of 256 paise, as global oil prices jumped, deepening concerns about the current account deficit and capital outflows. Consistent dollar demand from banks and importers, mainly oil refiners, following higher crude oil prices, kept the rupee under pressure.
At the interbank foreign exchange market, the rupee opened at 66.90 a dollar against 66.24 previously and dropped to 68.75 in late morning deals. It recovered some ground in the afternoon after the central bank was said to have intervened but dropped to an all-time intra-day low of 68.85 before ending at 68.80, a fall of 256 paise or 3.86 per cent. In three trading days in a row, the rupee has lost 560 paise, or 8.86 per cent, against the dollar. So far in August, it has tanked by 840 paise, or about 14 per cent, and in the current year by 1,381 paise or over 25 per cent.  

FALL AGAINST ALL CURRENCIES

As rupee's record fall against the US dollar continues to hog the limelight, it has also lost ground and breached key levels against a host of other currencies including British pound, euro and Swiss franc. Adding to rupee's woes, British pound today crossed Rs 106 level, euro went past Rs 92, Swiss franc touched Rs 75 mark, Canadian dollar was at Rs 65, Australian dollar at over Rs 60, while New Zealand dollar, Singapore dollar, Bruneian dollar and Libyan dinar crossed Rs 50 level. Among even more expensive foreign currencies, one Kuwaiti dinar is now worth more than Rs 240, Bahraini Dinar over Rs 180, Omani rial has went past Rs 175 and Latvia Lat at Rs 130. Against the most prominent foreign currency US dollar, the rupee has fallen to a record low of Rs 68.75.
The US greenback has appreciated by about 28 per cent since May this year, amid aggravating concerns over flight of foreign funds from India due to weak domestic economic conditions and global headwinds. Rupee's fall has been same or higher against a host of other foreign currencies including pound, euro, Swiss franc for the same period. The plunge has been less sharper against a few like Australian dollar (10 per cent), New Zealand dollar (16 per cent) and Brazilian real (8 per cent).
A few currencies against which the rupee has appreciated since May include those in countries like Panana, Tongo, Surinam, Tajikistan, Solomon Islands, Salvador, Haiti, Kyrgyzstan, Liberia, Syria, Congo, Somalia, Sierra Leon and Guinea.An analysis of foreign exchange rates across the world shows that Kuwaiti dinar is the most expensive against the rupee at current level of close to Rs 243, followed by Bahraini dinar (Rs 182), Omani rial (Rs 178) and Latvian lat (Rs 130).
Among the major foreign currencies, British pound is the most expensive and hit a record high of Rs 106.91 this afternoon, followed by euro, Swiss franc, US dollar, Canadian dollar and Australian dollar.
At least eight foreign currencies currently trade over Rs 100 mark, including Isle of Man pound, Gibraltar pound and Jersey pound. Besides, euro and Jordanian dinar are in 90s. At least 50 foreign currencies trade at over Rs 50 level.
The number of foreign currencies having a value higher than rupee is at least 100, while those valued less than Indian currencies include those of Bangladesh, Liberia, Algeria, Serbia, Kenya, Angola, Japan, Nepal, Pakistan, Albania, Syria, Iceland, North Korea, Sri Lanka and Nigeria. Currencies in countries like Guyana, Yemen, Hungary, Malawi, Zimbabwe, Costa Rica, Chile, Rwanda, Congo, Burma, South Korea, Iraq, Somalia, Lebanon, Burundi, Mongolia, Tanzania, Colombia, Uzbekistan, Uganda, Cambodia, Paraguay, Lao, Belarus, Indonesia, Iran and Vietnam also carry value less than one rupee. 

CARS AND CONSUMER DURABLES TO BE COSTLIER

As the rupee continues its freefall against the dollar, cars, TVs, washing machines and other home appliances are set to cost more with companies set to hike prices to offset impact on their margins. While General Motors India has announced that it will hike the price of three of its models by up to Rs 10,000 from September first week, Godrej Appliances and Haier also said they would increase prices of their products by up seven per cent from next month. "The sharp rupee depreciation combined with heavy discounting due to competitive pressure has adversely impacted margins. So, we have decided to raise prices in the range of Rs 2,000-10,000 from September first week," General Motors India Vice-President P Balendran told PTI. The company will be increasing the prices of its compact car Beat, SAIL and multi-purpose vehicle Enjoy by 1.5 per cent, which translates to a range of Rs 2,000 to Rs 10,000. Consumer durables maker Haier's India President Eric Braganza said the company had no option but pass on the burden of the rupee depreciation to consumers.
"We would increase price between 4 per cent from September 1," he said, adding: "it could go up to six per cent also if the rupee slides further". Echoing similar sentiments, Godrej Appliances Executive Vice-President, Sales & Marketing, Kamal Nandi said that rupee depreciation has put an "adverse impact on the industry" and put pressure on the prices. "Given the scenario that it has crossed 68 against the dollar now, one can expect price increase ranging from 5 to 7 per cent starting from September," he said. The rupee today tumbled to all-time low of 68.75 against the US dollar in early trade. Other companies like Samsung, Sony and Whirlpool have said the adverse currency fluctuation has made import of components very expensive thereby putting strain on margins. Samsung has recently increased the price of its mobile phones and tablets up to five per cent to undo the effect is also considering the same. "Given the sharp rupee depreciation , we are considering a price increase for our consumer electronics products as well," Samsung India senior VP - Consumer Electronics Business - Atul Jain said.