MUMBAI The rupee today slumped 43 paise against the dollar to trade at a life-time low of 70.32 on strong demand for the US currency.
At the Interbank Foreign Exchange, the local currency opened at a record low of 70.25 a dollar, down from its previous close of 69.89, and weakened further to trade at a fresh low of 70.32, down by 43 paise.
Forex dealers said besides strong demand for the American currency from importers, capital outflows mainly weighed on the domestic currency.
A sharp surge in trade deficit too impacted the rupee. Trade deficit soared to a near five-year high of USD 18 billion, data released by the commerce ministry on Tuesday showed.
Furthermore, depreciation of the Turkish lira against the dollar after the US imposed tariffs on steel and aluminium imports also put pressure on the Indian rupee, they added.
The rupee had gained 4 paise, to close at 69.89 against, the dollar in the previous session on Tuesday.
Forex market was shut yesterday on account of Independence Day.
Meanwhile, the BSE Sensex fell by 207.03 points, or 0.54 per cent, to 37,644.97 points in early trade.
Foreign institutional investors (FIIs) sold shares worth a net of Rs 378.84 crore on Tuesday, as per provisional data.
Falling rupee not a cause of worry: Niti Aayog VC
Niti Aayog vice chairman Rajiv Kumar today said the falling rupee is not a cause of worry as it is getting back to its natural value.
“The rupee rose by about 17 per cent during the last three years. Since the beginning of this year, rupee has declined by only 9.8 per cent. So, it has recovered. It is rather coming back to its natural value,” he said on the sidelines of an event organised by Nabard here.
Rupee should be realistically valued and should not be overvalued, he said, adding that the exchange rate is a price which should reflect true equilibrium between demand and supply.
He pointed out that one should not be under the impression that appreciation of rupee is a sign of a good economy.
To a question if the depreciating Indian currency was a cause of worry, Kumar said, “certainly not.”
Continuing its free fall, the rupee today slumped 43 paise against the dollar to trade at a life-time low of 70.32 on strong demand for the US currency.
Allaying concerns about state of India’s economy, he said, “Our rate of growth is up. Our exports are also beginning to rise. Our agriculture production is up. Our employment growth is up.”
While releasing Nabard All India Rural Financial Inclusion Survey, Kumar said India has capability of doubling farm income in the next few year as the Prime Minister promised yesterday.
India has already achieved food sufficiency and there is efficient distribution network as well, he said.
Having done this, the country be preparing itself for agriculture export, he said, adding that it would require mind set and analytical change to think as nation which could substantially export agro products.
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