The Rupee today collapsed to a lifetime low of 70.52 by plunging 42 paise against the US Dollar on strong month-end demand for the American currency amid foreign fund outflows. At the interbank foreign exchange market, the Rupee opened lower at 70.32 USD against 70.10 previously and dropped further to a new low of 70.52 in late morning deals, down by 42p.
Consistent Dollar demand from banks and importers, mainly oil refiners, following higher crude oil prices, kept the Rupee under pressure. Overseas, the US Dollar inched higher against the basket of currencies in early Asian trade, after dipping to a four-week low overnight. Relief over the US-Mexico trade deal was dimmed by concerns that the China-US trade war will drag on for some time. Trade deficit soared to the five-year high of $18 billion. India’s trade deficit soared to a nearly five-year high of $18 billion, which also affected the Rupee. Yesterday, Rupee bounced back from the record closing low, gaining 6 paise to end at 70.10 against USD. The 30-share BSE Sensex, after hitting an all-time record high of 38,989.65 in early trade, slipped into the negative zone by falling 53.84 points, to 38,842.79 at 1130 hours.
Commenting on the continuous Rupee fall against US dollar, former Reserve Bank of India Governor Raghuram Rajan had said in an Interview with Bloomberg on August 24, It has not depreciated to worrying levels it sort of dollar strength around the world. It is time for India to focus on getting the micro in order and getting macro stability before going into the election, Rajan said. On August 16, when Rupee fell to Rs 70.28 against the US dollar experts had claimed that the crisis is unlikely to resolve soon and the continued absence of RBI could result in the rupee falling extensively to Rs 71 per dollar.