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  1. Rupee at record low: Breaches 72.50-mark, now down 93 paise to fresh low of 72.67/$

Rupee at record low: Breaches 72.50-mark, now down 93 paise to fresh low of 72.67/$

Rupee at record low: Following the plunge in the rupee, the domestic equity markets too dived deep into the red zone, with the BSE Sensex plunging over 400 points on Monday afternoon.

By: | Updated: September 10, 2018 1:00 PM
rupee at record low, rupee vs dollar Rupee at record low: Breaches 72.50-mark, now down 93 paise to record low of 72.67/$

The rupee continued its free fall and plunged to a fresh record low of 72.6738 against the US dollar during afternoon trade on Monday, tumbling nearly 93 paise from its last close. In early morning deals, the domestic currency slid 45 paise to a low of 72.18 against the greenback, Bloomberg data showed, surpassing its previous record low of 72.11 against the dollar hit on September 6. Gains in the US dollar, along with concerns over the country’s widening trade deficit and strong demand for the greenback from importers and banks, weighed on the rupee’s sentiment.

Following the plunge in the rupee, the domestic equity markets too dived deep into the red zone, with the BSE Sensex plunging over 400 points on Monday afternoon. Around 12.25 pm, the benchmark Sensex index tanked 418.39 points, or 1.09%, to trade at 37,971.43 points. The broader Nifty 50 of the National Stock Exchange traded lower at 11,470.65, down 118.45 points, or 1.02%, around the same time.

“Dollar index traded higher on Friday after US August jobs data showed pick up in wage growth. Unemployment rate is at 18 yr low at 3.9%. On Monday, Indian Rupee opened gap up and continues to depreciate against the dollar,” Bhavik Patel, Senior Technical Analyst, Tradebulls Securities, told FE Online. “We expect Rupee to slip till 72.80 within this week,” he added. “Pressure is building for government to cut excise duty in petrol/diesel. If the government approves this populist move, we may see rupee slide appreciate and get extended till 73.50 as a cut in excise duty will increase our fiscal deficit. Overall we still are negative on Indian Rupee,” Patel said.

Also read: Share Market Live: Sensex, Nifty fall into red; rupee hits new record low

Besides the strong demand for the American currency, the domestic currency was weighed on by buying by importers, mainly oil refiners in view of surging crude oil prices and capital outflows, PTI reported quoting forex dealers. The dealers added that the dollar strength against its rival currencies overseas amid fears of a possible escalation in the US-China trade conflict too put pressure on the rupee.

The rupee on Friday staged a turnaround to close higher by 26 paise at 71.7388 after heavy intervention by the Reserve Bank of India. “On Friday, RBI heavily intervened but we don’t expect such heavy intervention this week as Dollar continues to trade stronger on US jobs data and trade tension,” added Patel.

Meanwhile, oil prices rose on Monday as U.S. drilling for new production stalled and as the market eyed tighter conditions once Washington’s sanctions against Iran’s crude exports kick in from November, said a Reuters report. A separate report showed that in the global markets, a sell-off in Chinese shares pulled Asian equities to a 14-month trough on Monday as investors braced for a potentially damaging escalation in the Sino-U.S. tariff row after U.S. President Donald Trump raised the stakes in the dispute with Beijing.

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