Indian rupee makes fresh lifetime low

Despite the various measures taken by Indian authorities, the beleaguered Indian rupee has shown not much signs of life, and has continued on a downward spiral in the past two years.

Exactly a couple of years ago, on August 2, 2011, the Indian rupee traded at Rs11.99 against Dh1 (Rs44 against $1).

Today, July 31, 2013, the rupee traded at Rs16.652 vs. Dh1 (Rs61.166 against $1) at 9.45am UAE time (05:45GMT), a whisker over its previous lifetime low of Rs16.63 vs. Dh1 (Rs61.09 against $1), made earlier this month on July 8, 2013.

That’s a decline of almost 40 per cent in 24 months, and it isn’t over yet.

Reserve Bank of India (RBI) Governor Duvvuri Subbarao yesterday said the country is caught in a classic ‘impossible trinity’ trilemma involving the currency, economic growth and inflation.

“India is currently caught in a classic ‘impossible trinity’ trilemma whereby we are having to forfeit some monetary policy discretion to address external sector concerns,” Subbarao said, adding that, had the currency been stable, the growth and inflation balance would have allowed for sticking with a monetary easing stance.