Rupee sinks 50 paise, settles at 86.26 against US dollar
The Indian currency logs the maximum single-day loss on April 8. It earlier recorded such a steep loss in one session on January 13 this year, when it had depreciated by 66 paise
Mumbai: Declining for the third straight session, the rupee tumbled 50 paise to settle at 86.26 (provisional) against the US dollar on Tuesday, logging the maximum single-day loss in nearly three months amid a looming global trade war stoking fears of economic meltdown.
According to forex traders, some recovery in crude oil prices and continued foreign capital outflows also dented sentiments.
Besides, the global markets have been facing extreme volatility following a fresh threat by the US administration to impose a punitive 50 per cent tariff against China’s retaliatory 34 per cent import levies on American products, they added.
At the interbank foreign exchange, the rupee opened at 85.89 and swung between a high of 85.82 and a low of 86.29 against the greenback. The unit ended at 86.26 (provisional), registering a loss of 50 paise from its previous closing level.
It had earlier recorded such a steep loss in one session on January 13 this year, when it had depreciated by 66 paise. On Monday, the rupee settled 32 paise lower at 85.76 against the US dollar, after losing 14 paise in the preceding session on Friday.
“The rupee experienced a decline in value against the US dollar, primarily driven by strong demand for dollars from importers and ongoing outflows of foreign funds from Indian equity markets.
“As a result, the rupee has emerged as the worst-performing currency among its Asian counterparts this month. Market sentiment continues to remain negative for the rupee, particularly following the imposition of reciprocal tariffs by the US, which has caused the currency to drop to its lowest point since March 21,” Dilip Parmar, Research Analyst, HDFC Securities, said.
On the domestic macroeconomic froth, investors are awaiting the Reserve Bank of India’s policy rate decision. The RBI’s monetary policy committee headed by Governor Sanjay Malhotra began its three-day deliberations on key interest rates on Monday. The decision is scheduled to be announced on Wednesday.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.06 per cent higher at 103.03.
Brent crude, the global oil benchmark, showed some recovery as it gained 0.19 per cent to USD 64.33 per barrel in futures trade.
The domestic equity markets rebounded from record low levels with the 30-share BSE Sensex surging 1089.18 points, or 1.49 per cent, to close at 74,227.08, while the Nifty jumped 374.25 points, or 1.69 per cent, to settle at 22,535.90 points.
On Monday, both the benchmark indices crashed over 5 per cent on Monday before closing nearly 3 per cent lower. Foreign institutional investors (FIIs) offloaded equities worth Rs 9,040.01 crore on a net basis on Monday, according to exchange data.
