Rupee plunges 15 paise to new lifetime low of 70.74 against the dollar

The rupee had plunged to a record low of 70.90 against the dollar in intra-day trade as firming oil prices fanned fears of widening current account deficit.

By: ENS Economic Bureau | Mumbai | Updated: August 31, 2018 1:21:37 am
Rupee plunges 15 paise to new lifetime low of 70.74 The strong dollar in overseas markets and losses in the stocks markets also impacted the rupee sentiment. (Illustration: CR Sasikumar/File)

Continuing its downward trend, the rupee on Thursday fell by another by 15 paise to close at a fresh lifetime low of 70.74 against the dollar due to month-end demand for the US currency from importers, rising crude oil prices and overall weakening of emerging market currencies, led by Argentine peso and Turkish lira.

The rupee had plunged to a record low of 70.90 against the dollar in intra-day trade as firming oil prices fanned fears of widening current account deficit. The strong dollar in overseas markets and losses in the stocks markets also impacted the rupee sentiment. The Argentine peso hit a record low and the Turkish lira resumed its slide, dramatising the strains faced by emerging markets most vulnerable to a rising dollar. While Argentina and Turkey are in particular trouble, many developing countries are being squeezed as the Federal Reserve raises rates, boosting the US dollar.

“Most of the emerging market currencies weakened against the US dollar. Turkish Lira was seen extending the fall, down by more than 5 per cent, the South African rand was trading lower by more than 1.9 per cent whereas Indonesian Rupiah was trading lower by 0.64 per cent,” said an analyst with IFA Global.

The domestic unit came under pressure on surging crude oil which held on its highest level in over a month, a dealer said. The benchmark Brent crude firmed up 31 cents to $ 77.45 per barrel.

Meanwhile, benchmark indices Sensex and Nifty fell for the second consecutive session as investors turned nervous over plunging rupee and rising crude oil prices. August futures and options (F&O) expiry further added to market volatility. The BSE benchmark Sensex slipped 33 points, or 0.08 per cent, to 38,690.

The NSE Nifty declined 15 points, or 0.13 per cent, to 11,677. Investors offloaded their long bets in F&O segment instead of carrying them forward to the next series for September, adding to volatility. Investors will be keenly awaiting the June-quarter GDP data to be announced on Friday which will be one of the factors to decide the market course.

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