Re’s lost over 20% this year Re Plunges 188 Paise To 66.19/$,

The Sharpest-Ever Fall In Absolute & Percentage Terms. Rattled By 1.3 Lakh Cr Food Bill, Stock Market Loses 2 Lakh Cr In A Day. And Gold Hits All-Time High 

Fear Of US Strike On Syria Roils Emerging Mkts

Mumbai:The rupee on Tuesday hit a record low of 66.30 before closing at 66.19, down 188 paise from Monday's close of 64.31, over concerns that the food security bill would throw government finances into disarray and fears of a US strike against Syria. 
    The rupee is emerging as a front-runner in a race to the bottom among emerging market currencies. In both absolute and percentage terms, Tuesday's drop is the highest ever. The rupee has fallen by around 20% 
since the beginning of the year. The only currency that has done worse is the South African rand which has fallen nearly 23%. Turkey's lira has dropped 14% while Brazil's real has fallen over 17%. The Chinese yuan has been the outlier, having gained nearly 2% in 2013. 
    Given the uncertainty over the rupee, gold, seen as a safe haven investment, soared to a new high of Rs 32,585/10 grams. Silver also rose, to a sixmonth high to retrace the Rs 56,000-per kg level. India faces risk of ratings downgrade, warn bankers 
Mumbai: The concerns over the food security bill and a possible US strike on Syria that caused the rupee to fall also dragged the sensex down 590 points to 17,968 on Tuesday. Bankers said with the government living beyond its means, India faced the risk of a downgrade by rating agencies. This would accelerate the outflow of foreign capital. 
    The general slowdown in the economy is also impacting the real estate market. Data released by National Housing Bank showed that property prices in 22 of the 26 cities covered, including Mumbai, Delhi, Bangalore and Chennai, have recorded a decline in prices during the quarter ended June as compared to the preceding quarter. 
    However, finance minister P Chidambaram said that the government would not exceed the fiscal deficit target projected for the year. He also said that the cabinet had approved infrastructure projects amounting to Rs 1,83,000 crore—including power projects. 
    "While the rising dollar is hurting all emerging markets, a lot of our pain is self-inflicted," said Ashish Vaidya, head of fixed income commodities and currency trading at UBS India. "The current crisis clearly threatens corporate balance sheets which usually have a reasonable line of overseas funding, which is going to take a hit," said Vaidya. He added that while depreciation leads to imported inflation, the food security bill will add to demand-led inflation as it will increase disposable income of the beneficiaries. 
    "The food security bill is expected to add to the fiscal burden. We believe crude oil has emerged as a key risk in the nearterm, which is not a good sign for the INR. Thus, the macroeconomic outlook has weakened and risks have clearly strengthened," said Sanjeev Zarbade, vice president, Kotak Securities. 
    "We estimate that the total cost of NFSB in its first full year could be Rs 1,17,000 crore, which amounts to an additional Rs 27,000 crore (0.25% of GDP) over the budgeted amount for FY14," said A Prasanna of ICICI Securities PD.