Rupee hits all time low, touches 62/$ despite RBI measures

However, recovers in afternoon trade on dollar selling by exporters

The rupee has slipped to all time low in early trade amid weak equity markets and despite a slew of measures announced by the central bank on late evening Wednesday aimed at boosting inflows and curbing outflows.

The rupee hit an all-time low of 62.03 to the dollar, breaching its previous record low of 61.80 hit on August 6.

However, rupee recovered in afternoon trade due to dollar sale by exporters. At 1:05pm it was quoting at Rs 61.65 compared with previous close of Rs 61.44.

The weakening rupee also resulted in bond yields rising. The yield on the 10-year benchmark government bond 7.16% 2023 was quoting at 8.65% compared with previous close of 8.50%.

On Wednesday, RBI deregulated NRE deposit rate offered by banks, which was capped at domestic desposit rate earlier and also hike ceiling on FCNR (B) deposit rate. These steps will be effective till Nov 30. Banks are unlikely to hike rates in a hurry as they do not see much deployment opportunity.

Also, RBI curbed outflows, first time since 1991, by cutting the ceiling on remittances and also said India companies' can invest upto 100% of their networth in overseas geography, as compared to 400% earlier.