The Indian rupee dropped sharply on the very first trading day of the third quarter of the financial year 2017-2018.
The Indian rupee dropped sharply on the very first trading day of the third quarter of the financial year 2017-2018. The domestic currency again fell into negative territory today after it partially recovered from its six-and-half month lows on Friday last week. The rupee dived as much as 33 paise to the day’s low of 65.61 per US dollar on Tuesday. The sharp plunge in the Indian rupee came in after the US dollar gained more strength against a basket of currencies overseas.
The US dollar hit a one and a half month high overseas as US manufacturing activity in September rose to its highest level in 13 years. The rupee had ended 22 paise higher at 65.28 against the dollar on Friday. The Forex market was closed on Monday for Gandhi Jayanti.
The depreciation in rupee might also be due to the fall in the foreign exchange reserves. After making record highs week after week, the foreign exchange reserves dipped marginally by $262.3 million to $402.246 billion in the week, due to fall in foreign currency assets, according to the RBI data. In the previous week, the foreign exchange reserves touched a record high of $402.509 billion.
Meanwhile, Sensex and Nifty opened higher on Tuesday following the positive cues from the Wall Street’s record closing on Friday last week. BSE Sensex advanced 254 points to open at 31,537.81 points while NSE Nifty added 104.7 points to start at 9893.3 points. The benchmark Sensex rose as much as 332 points to hit the day’s high of 31,615.28 points. The two-day bi-monthly policy meeting of the Reserve Bank of India will be starting from today. The outcome of RBI policy meeting, macroeconomic data points and investment trend of overseas investors will guide the Indian stock markets this week. Foreign institutional investors pulled out over Rs 11,000 crore from stock markets in September.