Indian rupee free fall: Below Rs17.55 vs Dh1

It’s the sentiment, Sir… and it’s against the Indian rupee and equity markets at the moment.

The battered currency just made a fresh lifetime low of Rs64.492 against the US dollar (Rs17.558 against the UAE dirham) at around 1.50pm UAE time (09:50 GMT) even as Indian officials claim that it’s business as usual in the country and that the markets are over-reacting to its financial mess. Read: We don’t need NRI money... expat cash will cause panic: official.

The benchmark BSE Sensex index declined by 400 points intra-day today and fell below 18,000 points for the first time since September 12 last year. The BSE Sensex index recovered a tad before closing the day 340 points down at 17,905 points, down 1.86 per cent over yesterday's close.

With this latest plunge, the rupee is now down 17.6 per cent since the beginning of 2013, and has officially become the world’s second worst performing currency this year, after the South African rand, which is down more than 20.6 per cent year-to-date.

The Brazilian real too is down 17.03 per cent YTD and fares better than the Indian rupee by just fractions of a percentage point.

Major global investment banks now believe that the rupee could slump to as much as Rs70 against the US dollar, which means that Indian expats in the UAE could see an exchange rate of Rs19 vs. Dh1. Read: Why Indian rupee might fall to Rs19 vs Dh1 by next month

The Indian rupee has been on a steep downward journey for some time now, especially since the beginning of May this year, having lost 19.35 per cent of its value since then.

The currency has lost almost half (46.5 per cent) of its worth in the past five years, and if the Rs70 vs. $1 prediction comes true by next month, that would translate into a loss of 61 per cent of its value in 60 months.