Indian Rupee on Thursday hit a fresh record low, the Rupee opened at 70.22 versus the US dollar. Reacting to the weak Rupee, former RBI governer Raghram Rajan in an interview to CNBC said that he was not too concerned about the domestic currency as "it is more a factor of dollar strength rather than necessarily rupee weakness".
On Thursday, the Indian currency touched an all-time low of 70.08 against the US dollar, while marking depreciation of around 10 per cent in 2018.
The fall came majorly due to a drop in Turkish Lira, which helped the US dollar to gained strength on the back of fears that economic crisis in Turkey could spread to other global economies.
"The rupee has been strengthening in real terms for some time now while inflation rate has been modest but above world inflation rates and as a result the rupee needs modest weakening over time. Hence, I am not too concerned about the rupee hitting an all-time low," Rajan said.
He further explained, "Currency weakness is a factor of dollar strength rather than anything else. But, I would say that investors should look at countries with large current account deficits as well as high level of debt."
Meanwhile, the Turkish lira strengthened against the dollar on Friday as investors weighed up a U.S warning that Turkey should expect more economic sanctions unless it hands over detained American pastor Andrew Brunson.
The lira has lost a third of its value against the dollar this year as worsening relations between the NATO allies added to losses driven by concerns over President Tayyip Erdogan's influence over monetary policy.
At 0656 GMT the currency stood at 5.7700 to the dollar, firming 0.7 per cent from a close of 5.8150. Turkish markets will be closed from midday on Monday for the rest of the week for the Muslim Eid al-Adha festival.
US Treasury Secretary Steven Mnuchin told President Donald Trump at a cabinet meeting on Thursday that sanctions were ready to be put in place if Brunson, a pastor on trial in Turkey on terrorism charges, was not freed.
