Rupee hits record low in opening trade

The partially convertible rupee was trading at 70.25/26 per dollar, at 0343 GMT, versus its Tuesday’s close of 69.90/91.

By :  migrator
Update: 2018-08-16 04:54 GMT
Representative Image

Mumbai

The Indian rupee dropped to a record low in opening deals on Thursday with investor sentiment affected by a widening trade deficit on the domestic front and the broad rise in the US dollar versus other Asian peers.

The dollar held near a 13-month peak on Thursday as political turmoil in Turkey and concerns about China’s economic health continued to support safe-haven assets and weighed on emerging market currencies.

At the Interbank Foreign Exchange, the local currency openedat a record low of 70.25 a dollar, down from its previous close of 69.89, andweakened further to trade at a fresh low of 70.32, down by 43 paise.

Forex dealers said besides strong demand for the Americancurrency from importers, capital outflows mainly weighed on the domesticcurrency.

A sharp surge in trade deficit too impacted the rupee. Tradedeficit soared to a near five-year high of USD 18 billion, data released by thecommerce ministry on Tuesday showed.

Furthermore, depreciation of the Turkish lira against thedollar after the US imposed tariffs on steel and aluminium imports also putpressure on the Indian rupee, they added.

Meanwhile, the BSE Sensex fell by 207.03 points, or 0.54 percent, to 37,644.97 points in early trade.

Foreign institutional investors (FIIs) sold shares worth anet of Rs 378.84 crore on Tuesday, as per provisional data. 

Markets were closed on Wednesday on account of Independence Day. The rupee hit a record low of 70.32 earlier in the session.

India’s trade deficit widened to a more-than-five-year high of $18.02 billion in July, the trade ministry said on Tuesday, driven largely by a surge in oil imports.

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