Rupee cracks below 90 to the dollar

HOWEVER, UDAY KOTAK, Founder & Director of Kotak Mahindra Bank, urged Indian businesses to break out of their comfort zone, warning that foreign investors appear to be calling the shots in current market dynamics.

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The rupee is one of Asia's worst performers, having fallen over 5% against the dollaryear-to-date. The rupee's decline from 85 to 90 took a little under a year, or less than half the time it took to fall from 80 to 85.

In terms of portfolio outflows, India is one of the worst hit markets globally, with foreign investors’ net selling of its stocks amounting to nearly $17 billion so far this year. The weakness in portfolio investment has also coincided with a slowdown in foreign direct investment, adding to the pressure.

Only a trade deal with Washington is likely to provide near-term respite for the rupee, according to Barclays strategists. For now, with the key 90 mark breached, the currency could slip further to 90.30 in the coming days, HDFC Securities warned.