Rupee plunges to a new low of 72.12 against USD
The Indian rupee crashed below the 72-level against the US dollar for the first time ever on persistent global headwinds and concerns on the macroeconomic front. The rupee was quoted 37 paise lower at 72.12 against the USD in afternoon trade. Investors remained concerned over sustained foreign capital outflows and widening current account deficit in the wake of soaring crude oil prices. Here's more.
Rupee opened higher but failed to sustain initial strength
At the Interbank Foreign Exchange (Forex) market, the local currency opened higher at 71.67 a dollar against its previous record closing of 71.75, but failed to sustain initial strength and fell back to breach the 72-mark. The rupee's unabated fall continued for the sixth straight session on Wednesday, hitting yet another closing low of 71.75, down 17 paise against the USD.
Demand for the American currency weighed on the domestic currency
On Wednesday, the rupee plummeted to a historic low of 71.97 a USD in intraday trade. Forex dealers said besides strong demand for the American currency from importers, concerns about fears of rising fiscal deficit and capital outflows mainly weighed on the domestic currency. Moreover, weakness in emerging currencies overseas against the dollar too weighed on the domestic currency, they added.
What Jaitley has to say on this
Finance Minister Arun Jaitley on Wednesday attributed the fall in the rupee to global factors and stressed that the domestic unit was better off as compared to other currencies.
BSE Sensex entered the negative zone by falling 61.11 points
Meanwhile, international Brent crude futures fell 27 cents, or 0.4%, to $77 per barrel. A fall in the crude prices is seen as positive for India, which imports most of its oil requirements, Forex traders said. Meanwhile, the BSE Sensex too entered the negative zone by falling 61.11 points, or 0.16%, to 37,957.20 points in the afternoon trade.