As the rupee crashed to a 39-month low of 68.84 against a dollar in early trade, the finance ministry attempted to de-link the fall with the demonetisation move and attributed it to the happenings in the US, including an imminent hike in rates by the US Federal Reserve and Donald Trump’s victory in the US Presidential election. The minister also said concessions given on using old currency notes of Rupees 500 and Rs 1,000 would be phased out in a calibrated manner.
The government is expected to come out with a statement on these concessions, which are expiring on Thursday.
A key finance ministry source said tumbling of the Rupee has nothing to do with withdrawal of old Rs 500 and Rs 1,000 currency notes. Instead, an imminent hike in interest rates by the US Federal Reserve and Donald Trump’s ascension as the President-elect of the US has weakened currencies all across Asia as investments are being pulled out from this region, the source said.
As India is in the middle of these Asian indices, the rupee is getting weakened, he added.