Mumbai/ New Delhi: The rupee plunged further to a record low against the US dollar as sentiments towards emerging market assets turned worse after South Africa slipped into recession.
Tracking weakness in emerging market currencies, the rupee fell to a record low of 71.97 a dollar in the intra-day trade, but regained some lost ground on suspected intervention by the Reserve Bank of India (RBI). The rupee finally closed the session at 71.76 a dollar, down 0.27 per cent from its previous session’s close of 71.57 a dollar.
“Exporters rushed to cover short-term orders and possible intervention by RBI through PSU banks might have helped the rupee to curb losses to recover back upto 71.65 before ending the session at 71.76 levels,” said Abhishek Goenka, founder of India Forex Advisors.
With RBI being less aggressive in defending the rupee fall, he said there was expectation regarding an interest rate hike or issuance of NRI bonds to raise dollar money.
The battered rupee has lost 165 paise in the last six trading sessions. In 2018 till date, the rupee has weakened close to 11 per cent and is the fourth worst performing currency after Brazil, Russia and South Africa.
Addressing the media after the Union Cabinet meet on Wednesday, finance minister Arun Jaitley attributed the fall in rupee to global factors and stressed that the local currency was better off as compared to other currencies.
“If you look at the domestic economic situation and the global situation, there are virtually no domestic reasons which are attributable to this. The reasons are global,” he said.
“It has not weakened... the rupee is better-off,” he said, adding that the rupee has strengthened against other currencies like the British Pound and the Euro.
