Rupee Plunges To Record Low of 69.62 against Dollar
The Rupee touched an all-time low of 69.62 per dollar in early trade on Monday, tracking broader weakness in other emerging market currencies on concerns of a spill-over from a crisis-hit Turkey.
The Reserve Bank of India was seen intervening to stem a sharp fall in the rupee as per market reports.
“The RBI was there to curtail the volatility in early trade, but not in a big way,” said a senior dealer at a foreign bank.
The Rupee reversed marginally from its record lows to trade at 69.53 to the dollar. It had ended at 68.84 to the dollar on Friday. The 10-year benchmark bond yield rose to 7.80% from its previous close of 7.75%, tracking the weakness in rupee.
Investors preferred safe-havens such as the US dollar and the yen after a plunge in the Turkish Lira sent all emerging market currencies sharply lower.
The lira has fallen about 45% against the greenback this year on worries over Turkish President Tayyip Erdogan’s increasing control of the economy and a deepening diplomatic rift with the United States.
“There is no point spending a lot of dollars in defending a rupee when the force of the fall is so strong across emerging markets,” said a senior forex dealer at an Indian state-run bank.
The next crucial level for the rupee is 69.80 to the dollar, he added.
Traders will also watch out for India consumer inflation data for July due after market hours for further direction. A Reuters poll estimates July inflation of 4.51% compared with a five-month high of 5.0% hit in the previous month.
Meanwhile, the BSE Sensex fell over 288 points and the NSE Nifty dipped below the 11,400-level in opening trade today on heavy losses in PSUs, auto, metal and banking counters amid a global rout in equity markets.
The rupee’s previous record low was 69.13, marked on July 20, 2018. On Friday, the rupee had lost 15 paise to end at 68.83 against the resurgent dollar.