The rupee hit the 72-mark in afternoon deals on Thursday, plunging 35 paise to a fresh record low of 72.1050 against the US dollar.
The rupee’s relentless depreciation continued for the seventh straight session, with the Indian currency closing at 71.99, showing a steep 24 paise fall on macroeconomic economic front and rout in emerging market currencies. In the afternoon deals, the rupee breached the 72-mark for the first time before recovering some losses.
“Markets are expecting some support from policy makers in terms of a separate window for OMCs and more relaxation on buyers credit and ECB guidelines. RBI intervened at various levels but was not very effective to contain the (rupee) movement,” Sajal Gupta, Head Forex and Rates, Edelweiss Securities Ltd, was quoted as saying by new agency PTI.
In early morning trade, the rupee had recovered 9 paise from its Wednesday’s record closing low to 71.66 against the greenback on fresh selling of the US currency by exporters and banks. However, the rupee pared initial gains on bouts of dollar demand from banks and importers.
On Wednesday, the domestic currency had tumbled nearly 40 paise to a low of 71.9650 against the dollar. On closing, the rupee had recovered by 20 paise to 71.7563 per dollar, data from Bloomberg showed. Analysts said the rupee’s recovery was due to the Reserve Bank of India’s mild intervention in the forex markets.
Finance Minister Arun Jaitley on Wednesday attributed the fall in the rupee to global factors and stressed that the domestic unit was better off as compared to other currencies. “Rupee continued to be ruled by speculation, pressured by crisis in emerging market currencies, escalating trade war tensions and rising crude,” PTI reported quoting a forex dealer.