The rupee hit a new record low of 72.73 in late afternoon trade on Tuesday, as it dropped 28 paise against the US dollar, reported news agency Press Trust of India (PTI). However, in early trade the rupee rose as much as 15 paise against the US dollar. Crude oil prices went past the USD 78 a barrel mark. Unabated foreign fund outflows and sharp plunge in domestic equities also weighed on the rupee, dealers were quoted as saying in the PTI report.
The rupee has shed more than 13 per cent against the dollar so far this year, cementing its position as the worst performing Asian currency.
A senior government official was quoted as saying in a report by news agency Bloomberg that the finance ministry and the Reserve Bank of India are in constant touch to monitor the rupee. The top bank is intervening when required, he was quoted as saying.
Moody's Investors Service said on Monday that the ongoing free fall of the rupee is credit negative for domestic companies, especially for those that generate revenue in rupees but rely on dollar debt to fund their operations and have substantial dollar-based expenses.
Swiss brokerage UBS said on Monday that it expects the rupee to fall to 73 by March 2019.
On Monday, the rupee ended at an all-time closing low of 72.45 against the greenback.
In the equity markets on Tuesday, the S&P BSE Sensex closed 509 points lower at 37,413.13 and the Nifty50 settled at 11,287.50, down 150.60 points. (With agencies inputs)