Rupee hits 16-month low against USA dollar

Adjust Comment Print

The on Tuesday plunged 56 paise, the second biggest single-day fall of 2018, before closing at 68.07.

The rupee closed at 67.80 against USA dollar, up 0.46% from its previous close of 68.11.

Mumbai: The embattled rupee suffered yet another blow on Monday - falling by 18 paise to end at a fresh 16-month low of 67.51 against the U.S. currency on heavy dollar purchases and sustained fund outflows from equities.

It is believed that the stemmed some of its losses after the Reserve Bank of India's (RBI) intervention. "In the absence of RBI's strong intervention for last few days, unhedged importers/ overseas investors were forced to cover their exposures leading to higher dollar demand in both onshore and offshore markets". Amid rising crude prices, foreign fund outflows in the recent past have also exerted pressure on the rupee. India is vulnerable to rising crude prices.

As on May 4, the central bank's weekly statistical supplement showed reserves declining to $418.94 billion from $420.36 billion for the week ended April 27.

The rupee's gain was partially helped by some softness in crude prices despite ongoing output cuts by producer cartel Opec and looming United States sanctions against major exporter Iran.

"Anand James, Chief Market Strategist at Geojit Financial Services said, "Even as political uncertainty continued to roil equity markets, rupee resisted weakness on the expectations of dollar selling by RBI, having tested 68".

Trade deficit widened to $13.72 billion in April 2018, from $13.69 billion in March, and compared with the $13.25 billion shortfall in the same month past year, according to official data released on Tuesday. Download The for your English and other languages.