Rupee plunges to record low as current account deficit widens to 5-yr high

The Indian rupee and bonds sunk after the current-account deficit widened to the most in five years, as an emerging-market rout raises investor scrutiny of countries with worsening balance of payments.

The rupee tumbled as much as 1.2 per cent Monday, the most in a month, to a record low of 72.5587, leading declines among Asia’s emerging-market currencies. The benchmark 10-year bond yield gained 11 basis points to 8.14 per cent, while stocks also declined.

Emerging markets have been roughed up in the past month as contagion fears start to spread following a meltdown in the currencies of Argentina and Turkey. India’s current-account gap widened in the June quarter to $15.8 billion, hurt by higher payments for oil, data released after market hours on Friday show.

“Apart from the dollar strength that’s weighing on the EM currencies, concerns about financing a wider current-account deficit are also hurting the rupee,” said Paresh Nayar, the Mumbai-based head of currency and money markets at FirstRand Ltd. At these levels, it remains to be seen if the RBI would support the currency in a big way, he said.

It's illegal: Modi govt to bar cryptocurrencies from its payments system

India is planning steps to ensure cryptocurrencies are illegal within its payments system, while at the same time appointing a regulator to oversee unregulated exchanges that trade in "crypto assets," a finance ministry official said on Monday.

A panel set by the government to look into issues relating to cryptocurrencies is expected to submit its report in the current fiscal year, ending on March 31, S C Garg, Economic Affairs Secretary, told CNBC TV18 news channel.

"The government will take steps to make it illegal as a payment system," he said at a post-budget event telecast by the news channel, adding the trading of "crypto assets" at the unregulated exchanges would be regulated.

"We hope now within this financial year the committee will finalise its recommendations ... certainly there will be a regulator," Garg, who is heading the panel, said.