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Rupee Slumps 54 Paise To Lowest In Over Six Weeks Against Dollar

At the interbank foreign exchange market, the rupee opened at 69.26 a dollar, then lost further ground and touched a low of 69.67 during the session.

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Rupee Slumps 54 Paise To Lowest In Over Six Weeks Against Dollar

On a weekly basis, the rupee has declined 71 paise.


The rupee dived 54 paise on Friday to close at an over six-week low of 69.60 against the US dollar as soaring crude oil prices and a fresh flare up in US-China trade tensions weighed on emerging market currencies.

Global markets tumbled and safe-haven assets like the Japanese yen gained after President Donald Trump on Thursday announced that the US will impose an additional 10 per cent tariff on $300 billion worth Chinese imports, which Beijing vowed to retaliate.

In a series of tweets, Trump said the new tariff, in addition to the 25 per cent on goods worth $250 billion that was previously in place, would come into effect from September 1.

Persistent foreign fund outflows and a strengthening greenback also put pressure on the domestic currency, forex traders said.

At the interbank foreign exchange (forex) market, the rupee opened at 69.26 a dollar, then lost further ground and touched a low of 69.67 during the session. The local unit finally settled at 69.60 a dollar, down 54 paise over its previous close. This is its weakest level since June 19 when it had settled at 69.68 against the American currency.

This is the second straight session of loss for the rupee, during which it has lost a hefty 81 paise.

On a weekly basis, the rupee has declined 71 paise.

"Global equities witnessed sell-off after US President Trump imposed additional tariff of 10 per cent on $300 billion Chinese goods and services," said V K Sharma, Head PCG & Capital Markets Strategy, HDFC Securities.

Meanwhile, brent crude futures, the global oil benchmark, soared 2.83 per cent to $62.21 per barrel.

The 10-year government bond yield was at 6.35 per cent on Friday.

"The yield on 10 year benchmark bonds down 9 bps to 6.34 per cent on Friday, yield up 19 bps so far this week. Flip flops over issuance of foreign currency debt created uncertainty in debt market," Mr Sharma added.

Foreign institutional investors (FIIs) remained net sellers in the capital markets, pulling out Rs 1,056.55 crore on Thursday, provisional data showed.

Equity benchmark BSE Sensex overcame a weak start to end nearly 100 points higher on Friday. The 30-share index rose 99.90 points or 0.27 per cent to settle at 37,118.22. Similarly, the broader NSE Nifty gained 17.35 points or 0.16 per cent to end at 10,997.35.



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