The Indian rupee tumbled to a three-week low slipping as much as 44 paise against the US dollar on Tuesday as concerns over trade deficit widening to a three-year high jolted the investor sentiments.
The Indian rupee tumbled to a three-week low slipping as much as 44 paise against the US dollar on Tuesday as concerns over trade deficit widening to a three-year high jolted the investor sentiments. The rupee opened marginally weak, down by 11 paise at 63.60 against the previous close of 63.49 per dollar. In the afternoon session, the rupee shed as many as 44 paise to hit a three-week low of 63.93 apiece US dollar. In the morning trades today, the rupee plummeted 26 paise against the US dollar at the interbank foreign exchange market. The Reserve Bank of India fixed the reference rate of the rupee at 63.4125 against the US dollar on Monday.
India’s trade deficit for the month of December widened to a 3-year high following a sharp rise in imports. The difference between imports and exports rose about 41% to $14.88 billion in December as the imports of crude oil and gold increased the bills. Earlier on Monday, the rupee strengthened by 14 paise to end at a fresh one-week high of 63.49 against the US dollar as Indian equities rallied to record high levels.
The trade deficit in the month of December widened to $14.88 billions as compared to $10.55 billion during the December 2016 period after gold imports skyrocketed 72% to $3.39 billion year-on-year. Besides, both exports and imports also rose in the month of December. Exports in the month of December was recorded $27 billion, up 12% year-on-year and imports was recorded $41.9 billion, up 21.1% year-on-year. Oil imports also showed a steep rise, up nearly 35% year-on-year to $10.35 billion. Oil imports last month was recorded at $9.55 billion. Merchandise exports for December rose 12.36% from a year ago to $27.03 billion. Goods imports last month were $41.91 billion, a gain of 21.12% from a year ago, data from the commerce and industry ministry showed.
Meanwhile, India’s stock market also fell into negative territory in the afternoon trades after starting on a positive note with Sensex and Nifty tripping up to 0.5% following a sell-off in heavyweight shares of companies such as Reliance Industries, ITC, HDFC, SBI, Tata Motors and Tata Steel. BSE Sensex was trading 75.13 points or 0.22% lower at 34,768.38 while NSE Nifty was trading down 49.65 points or 0.46% at 10,691.9. Shares of FMCG giant Hindustan Unilever rose about 1.6% to a 52-week high of Rs 1,389 ahead of its Q3 earnings due tomorrow.