Indian rupee plummets to historic low of 70.09 on Turkish lira collapse

The ongoing currency turmoil in Turkey has dampened investors' sentiments globally. Investors are turning to dollar as safe haven with Turkey's currency lira crisis continuing since the last week. This has also hit the Indian rupee which yesterday touched a historic low. In the opening trade today at the interbank foreign exchange market it recovered but again collapsed. 
 
Despite its early gains, the rupee again collapsed to a life-time low of 70.09 against the US dollar, falling 16 paise amid fears that Turkish economic crisis could lead to a global financial meltdown. At the interbank foreign exchange market, the rupee was trading higher by 0.21 percent at 70.07 against US dollar at 10.37 am.
 
The rupee recovered from all-time low of 69.91 and strengthened by 23 paise to 69.68 against the US dollar in opening trade at the interbank foreign exchange market today on some macroeconomic boost. Panic and capitulation overshadowed trading mood as traders and speculators saw no signs that monetary authorities would step into the foreign exchange market to support the domestic unit.
 
Yesterday, the rupee had plunged by Rs 1.08, or 1.57 per cent, to a record low of 69.91 against the US currency. It was the biggest single-day fall for the rupee in the past five years. 
 
Previously, the rupee had dropped 2.4 per cent or 148 paise in a single day in August 2013.
 
The Turkish Lira has lost more than 40 percent against the dollar this year, largely due to worries about President Tayyip Erdogan`s influence over the economy, his repeated calls for lower interest rates, and worsening ties with the United States, a Reuters report has said. 
 
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The currency pulled back from a record low of 7.24 to the dollar on Monday after the central bank pledged to provide liquidity, but it remained under selling pressure and its meltdown caused further unease on global markets.