Rupee and British Pound Fall Fast Against the U.S. Dollar
Posted on 09/26/2022
A surge in U.S. bond yields and the U.S. dollar index has caused a number of currencies to fall against the U.S. dollars such as the Indian rupee and British pound. The rupee on Monday (September 26, 2022) ended at a fresh record low of 81.62 against the U.S. dollar after depreciating to an all-time low of 81.6526 during the day. The 2-year U.S. Treasury yield was at 4.2%, its highest level since October 12, 2007. The Reserve Bank of India is suspected to have sold U.S. dollars through state-run banks to prevent a larger decline in the rupee.
Following last week’s announcement by British Chancellor of the Exchequer Kwasi Kwarteng’s announcement on tax cuts and investment incentives to boost growth, the British pound dropped as much as 4.9% against the U.S. dollar to an all-time low of US$ 1.0327. There are growing fears about the stability of U.K. government finances. In addition, the euro also hit a 20-year low against the U.S. dollar.
