Rupee crashes 21 paise to all-time low 71.21 vs US dollar

Both BSE and NSE recorded the biggest single day fall since August 2, when the BSE had lost 356.46 points and the NSE Nifty 101.50.

The BSE Sensex pared all its early gains to end lower by about 333 points in see-saw trade, posting its fourth straight session fall, as the rupee’s decline hit the sentiment. (Express photo by Pradip Das/Representational purpose)

The rupee on Monday remained under pressure and fell by 21 paise to close at a record low of 71.21 against the dollar on the back of high oil prices, trade tensions and weak global cues. The BSE Sensex pared all its early gains to end lower by about 333 points in see-saw trade, posting its fourth straight session fall, as the rupee’s decline hit the sentiment.

The currency which started on a better note fell under pressure even though the government last week reported that the economy grew at a two-year high of 8.2 per cent in the April-June quarter of current fiscal on good show by manufacturing and farm sectors. On Friday, the rupee had closed lower at 71 against the dollar as emerging market currencies including Argentine peso and Turkish lira declined.

The Indian currency has depreciated over 11 per cent in 2018 which is largely weighed down by higher crude oil prices, the demand of dollars from oil marketing firms and the overall strength in the dollar with respect to emerging market currencies. International Brent crude oil futures were at $77.59 per barrel at 0046 GMT, down 5 cents from their last close. US West Texas Intermediate (WTI) crude futures were at $69.81 per barrel, virtually unchanged from their last settlement.

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“The recent surge in global oil prices, concerns over US-China trade war and contagion risks from Turkey and Argentina are the factors impacting forex market sentiment,” said a forex dealer. The Nikkei India Manufacturing Purchasing Managers’ Index fell to 51.7 in August from 52.3 in July, as operating conditions improved at the slowest pace since May.

The broader NSE Nifty closed below the 10,600 mark by plunging by 98.15 points, or 0.84 per cent, at 11,582.35 after shuttling between 11,567.40 and 11,751.80. Both BSE and NSE recorded the biggest single day fall since August 2, when the BSE had lost 356.46 points and the NSE Nifty 101.50.

Bond yields touch 8%

Mumbai: Yields on benchmark 10-year government bonds on Monday touched a near four-year high of 8 per cent amid the surge in crude oil prices and weakening of the currencies.

The 10-year govt bond yield settled at 7.999 per cent, a level last seen on December 1, 2014, as against its previous close of 7.952 per cent. In intraday trade, the yield touched 8 per cent. Bond yields and prices move in opposite directions — when yields rise, prices decline. The rise in yields is likely to put pressure on the RBI to increase interest rates further. —ENS

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