Rupee slumps below 70 against U.S. dollar

Rupee gains 41 paise against US dollar opens at 68.42
The rupee’s previous record low was 69.13 marked
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15 August, 2018

"A slowing Chinese economy, tightening monetary policy and an escalating trade war are some of the main reasons for this turmoil into currency markets as sentiments towards emerging markets are worsening".

Rupee hits a fresh lifetime low as EM currencies slide. Previously, the rupee had dropped 2.4 per cent or 148 paise in a single day in August 2013.

The euro hovered near one-year lows against the dollar and the Swiss franc as the Turkish lira wobbled, on worries economic troubles in Turkey could hit European banks and spread to other emerging economies.

Recent US-imposed sanctions and tariffs on Turkey have had an impact on its currency. Later, it recovered some ground after the ænance ministry assured steps to rein in the crisis.

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Mumbai: The rupee plunged to yet another record low on Tuesday breaching the psychological 70 level mark against the United States dollar as concern regarding the currency crisis in Turkey spreading to other emerging markets forced investors to shun riskier assets and seek the safety of U.S. dollar.

India plans to raise 6.06 trillion rupees ($86.71 billion) in the current fiscal year ending in March 2019, to fund the fiscal deficit. "The dollar index has strengthened beyond 96 levels reflecting its safe-haven status due to a possible domino effect of the Turkey crisis on the other financial institutions". "Importers were seen aggressively buying dollars in the forward market putting further pressure on the rupee", said Abhishek Goenka, chief executive officer (CEO), India Forex Advisors.

The currency crisis in Turkey, which had a massive impact on Asian markets on Monday, began after President Recep Tayyip Erdogan asked citizens to exchange gold and dollars into the lira as the country's currency dropped almost 19% due to worsening relations with the United States.


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