Indian rupee slumps to fresh record low of 71.79 against US dollar
At the interbank foreign exchange market in Mumbai today, the rupee resumed higher at 71.43 against yesterday's closing level of 71.58 a dollar. The Indian unit was trading on a volatile note, moving in a wide range quoting between 71.40 and 71.79 during morning deals.
The Indian rupee today erased initial gains to drop to a fresh all-time low of 71.79 against the US currency. The domestic currency slumped 21 paise in late morning deals on sudden bouts of dollar-buying by banks and importers. This was the sixth consecutive session when the local currency depreciated. At 10.55 am, rupee was trading at a record low of 71.75 a dollar, down 0.25% from yesterday's close of 71.57.
At the interbank foreign exchange market in Mumbai today, the rupee resumed higher at 71.43 against yesterday's closing level of 71.58 a dollar. The Indian unit was trading on a volatile note, moving in a wide range quoting between 71.40 and 71.79 during morning deals, said a PTI report.
This reportedly saw the 10-year government bond yield to end at 45 months high of 8.06%, a level last seen on November 28, 2014.
"Rupee's speculative demand is causing volatility amid crisis in the emerging market currencies and consistent rise in the crude oil prices," a dealer said.
The dollar strengthened against a basket of currencies overseas as the US economy continued to exhibit strength amid threat of escalation in the US-China trade conflict, leading to a fall in the domestic unit.
Emerging markets were further hit after receiving news about South Africa’s economy slumping into recession yesterday, a day after Turkey reported a surge in inflation. Philippines too announced on Wednesday that inflation exceeded 6% for the first time since 2009.
The Reserve Bank of India (RBI) likely intervened mildly in the forex markets on Wednesday, two traders told Reuters, as the rupee hit a fresh low in line with other emerging market currencies hurt by dollar strength and simmering trade tensions.
The RBI is expected to have sold dollars at 71.80 rupees per dollar in the local spot forex market to stem a sharp fall in the Indian currency, said Reuters report.
The RBI had hiked repo rate by 25 basis points (bps) in the past two consecutive policy meeting to 6.50% as policymakers tried to strike a balance between rising inflationary pressures and still recovering growth.
Watch this Zee Business video
The rupee this year so far has weakened 10.8 per cent, while foreign investors have sold $488.60 million and $5.75 billion in equity and debt markets, respectively, said a LiveMint report.
Meanwhile, the 30-share BSE Sensex is modestly lower by 29.83 points or 0.08 per cent at 38,128.09 at 1100 hrs.
Get Latest Business News, Stock Market Updates and Videos; Check your tax outgo through Income Tax Calculator and save money through our Personal Finance coverage. Check Business Breaking News Live on Zee Business Twitter and Facebook. Subscribe on YouTube.