The Indian rupee collapsed below the 72-level for the first time ever against US dollar today, reported news agency Press Trust of India (PTI). The domestic currency slipped 37 paise to trade at 72.12 against the US currency in afternoon trade. The fall in Indian currency is due to the persistent global headwinds and concerns on macroeconomic front. Investors remained concerned over sustained foreign capital outflows and widening current account deficit in the wake of soaring crude oil prices. The Reserve Bank of India (RBI) was not spotted intervening after the rupee pierced the 72 level, according to a Reuters report.
Here are key things to know:
1. At the Interbank Foreign Exchange (Forex) market, the domestic currency opened higher on Thursday 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.
2. The rupee has fallen nearly 2 per cent this month and more than 12 per cent this year.
3. Finance Minister Arun Jaitley attributed the fall in rupee to global factors and stressed that the domestic unit was better off as compared to other currencies. He further said the Reserve Bank is doing whatever is necessary to deal with the situation.
4. The Reserve Bank of India (RBI) likely intervened mildly in the forex markets on Wednesday. The RBI is expected to have sold dollars at 71.80 rupees per dollar in the local spot forex market to stem a sharp fall in the Indian currency, reported Reuters.
5. "The rupee is presently squeezed between a strengthening dollar and firming up of the oil. Rupee's current weakening is more reflective of the impact the rising oil prices will have on our fiscal deficit. Statements from the Finance Minister indicate that the government is comfortable with a gradual depreciation and we can expect some intervention which will only stem a sudden fall but not a reversal", told Salil Datar, Executive Director and CEO, Essel Forex Limited to NDTV.
6. On Wednesday, the rupee declined 17 paise against the US dollar to close at another closing low of 71.75. That marked the sixth consecutive session with the rupee settling lower against the greenback.
7. The unabated fall continued for the sixth straight session as surging oil prices and weak trend in emerging market currencies weighed on sentiments. Intra-day, the domestic unit plummeted to a historic low of 71.97 a dollar before finding some respite on Wednesday.
8. Meanwhile, benchmark equity indices opened on a flat note on Thursday. The S&P BSE Sensex rose 47.82 points or 0.13 per cent to trade at 38,066.13. The broader Nifty50 climbed 26.70 points or 0.23 per cent to trade at 11,503.65.
9. Asian shares fell for the sixth straight session on Thursday as oil skidded and safe-haven gold gained, with investor confidence shaken by turmoil in emerging markets and jitters over a potentially severe escalation in the US-China trade war.
10. Oil prices fell on Thursday as emerging market woes weighed on sentiment. (With agencies inputs)