Rupee closes at all-time low of 72.97 a dollar

Mumbai: The Indian rupee on Tuesday hit a fresh record low against the US dollar and closed near the 73-mark, tracking losses in the local equity markets after US said it will impose fresh tariffs on China. The rupee ended at an all time low of 72.97 a dollar, down 0.63% from its Monday’s close of 72.51. The home currency opened at 72.60 per dollar and touched a low of 72.97. The 10-year bond yield closed at 8.14%, from its previous close of 8.098%. Bond yields and prices move in opposite directions.

“A stronger USD and limited policy action could disappoint the market. There remain many negative risks to INR—especially those that are global-led, but it is also clear that the government could step up actions if there is another round of significant INR depreciation/underperformance,” Nomura Research on 16 September said.

Meanwhile, Bloomberg reported that Saudi Arabia is now comfortable with Brent rising above $80 as the global market adjusts to the loss of Iranian supply, also dampened sentiments.

US will impose a 10% tariff on about $200 billion of Chinese goods from 24 September and will immediately pursue further tariffs on about $267 billion of imports from the Asian nation if Beijing retaliates, President Trump said in a statement on Monday in Washington

Chinese Vice Premier Liu He is convening a meeting in Beijing on Tuesday morning to discuss the government’s response to the additional tariffsBloomberg reported.

Benchmark Sensex Index fell 0.78% or 294.84 points to 37,290.67. Since January, it has gained 9.5%.

“(Market corrected due to) spike in oil prices led by factors like implication of US sanction on Iran and supply constraints. Domestic triggers failed to add momentum despite ease in inflation, govt. policies to contain CAD and consolidation in PSUBs.

This situation will ease once the global bond & currency market stabilize which is currently under pressure given chaos over Oil and FED rate hike,” said Vinod Nair, head of research, Geojit Financial Services.

So far this year, the rupee has weakened 12.5%, while foreign investors have sold $784.50 million and $6.38 billion in equity and debt markets, respectively.

Bloomberg contributed this story

Source: LivMint

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