Indian Rupee Plunges To All-time Low of ₹ 70.65 Against Dollar

Indian Rupee touched its all-time low of 70.65 against US dollar on Wednesday (29) following high month-end demand for dollar from importers and foreign investment outflows.

The Indian currency fell by 0.70 per cent or Rs 0.49 to close at 70.59 against US currency at interbank foreign exchange market. The rupee had earlier fell to its all-time closing low of 70.16 on Monday (27), earlier this week.

According to the market participants, firm demand for dollar from banks, importers, oil refineries triggered by higher crude oil prices put rupee under pressure on Wednesday (29).

As of now, the investors are eyeing on India’s Gross Domestic Product (GDP) and fiscal deficit data scheduled to be released on Friday (31) to gather clues on the health of the domestic economy. The rupee is expected to exhibit range bound trade of 70.20 and 70.75 for the next two days, market analysts opine.

At the interbank foreign exchange market, the rupee opened lower at 70.32 a dollar against 70.10 previous close and dropped further to a new low of 70.65 in the afternoon trade, down by 55 paise.

Dollar’s strength against some foreign currencies and an upward movement in the global crude oil prices put further pressure on the Indian currency. The dollar index, which indicates the strength of US currency against a basket of currencies, was seen trading up 0.22 per cent at 94.83 on Wednesday (29).

India’s trade deficit touched to a near five-year high of £13.84 billion preventing the gains in rupee. Foreign investors have withdrawn around £ 0.15bn from Indian capital markets on Wednesday (29), according to the provisional exchange data.

The local currency had recovered from the record closing low, gaining 6 paise to end at 70.10 against the US currency on Tuesday (28).