Rupee free fall continues: The domestic currency closed above the 71-mark for the first time ever, recovering a tad from its fresh low to settle Monday's trade at 71.2050 against the American currency.
The rupee continued its downward trajectory and slipped 21 paise to hit a fresh record low of 71.2137 against the US dollar on Monday. The domestic currency closed above the 71-mark for the first time ever, recovering a tad from its fresh low to settle Monday’s trade at 71.2050 against the American currency, Bloomberg data showed. The Indian rupee failed to sustain at higher levels and plunged to a new low — reclaiming the 71/USD mark — on the back of a strong dollar against most overseas currencies.
The sentiment was also hampered by a lower closing of the domestic stock market. The domestic stock market failed to sustain morning gains and closed in the negative territory on Monday, with the Sensex slipping nearly 380 points and the Nifty 50 index surrendering the 11,600 level in late-afternoon trade. In addition, a surge in global oil prices, concerns over US-China trade war and contagion risks from Turkey and Argentina hampered the sentiment of the rupee.
In Monday’s opening trade, the rupee had recovered from its low of 71, strengthening by 23 paise to 70.77 against the US dollar, amid robust growth data for the April-June quarter of current fiscal. Last week, the domestic currency had breached the 71-mark for the first time, plunging 26 paise to a record low of 71.0013 against the US dollar during early morning trade on Friday. The rupee had slightly recovered to end Friday’s session at a record closing low of 70.9950 against the greenback.
“We expect INR to trade test the levels of 71.40-71.50 this week. RBI intervention is very light in the market and that is positive as it is letting market decide the desired level for the Indian rupee instead of depleting foreign exchange reserves,” Bhavik Patel, Senior Technical Analyst, Tradebulls Securities, told FE Online.
Meanwhile, global stock markets fell for a third straight day on Monday, hurt by worries over the escalation of trade disputes between world powers and a deepening sell-off across emerging market currencies, a Reuters report said. The dollar consolidated near a one-week high against a basket of rivals as tensions around global trade negotiations fuelled demand for the greenback, though concerns about capital flows checked gains.