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Rupee hits lifetime low of 70 per dollar

Rupee hits lifetime low of 70 per dollar

Mumbai: The rupee plunged to yet another record low on Tuesday breaching the psychological 70 level mark against the USA dollar as concern regarding the currency crisis in Turkey spreading to other emerging markets forced investors to shun riskier assets and seek the safety of USA dollar. The rupee has been on the downslide since the beginning of this year and has slipped around 9% in 2018.

This is the steepest fall for the Indian rupee since September 2013. "The dollar index has strengthened beyond 96 levels reflecting its safe-haven status due to a possible domino effect of the Turkey crisis on the other financial institutions".

The fall in the rupee is leading to a widening of India's current account deficit, when the value of imports exceeds the value of exports, they say.

The intervention aided the rupee stabilise just a tad below 70 to a Dollars at 69.98 around 11.05 a.m.

However, Economic Affairs Secretary Subhash Chander Garg said external factors may ease going forward.




"There is nothing to worry at this stage".

"Further rise in crude prices or fresh trouble in the emerging markets, Euro area could result in risk-off sentiments setting in resulting in a fresh round of weakness for emerging market currencies including India despite intermittent RBI intervention from time to time".

The crisis has been sparked by a series of issues including a faltering economy - the central bank has defied market calls for rate hikes - and tensions with the United States, which has hit Turkey with sanctions over its detention of an American pastor.

On Monday, the rupee had sunk to 69.93, plunging by Rs 1.08 amid fears that the crisis in Turkey could manifest into a global financial crisis.

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