Rupee tumbles 50 paise to end at lowest-ever level of 96.70 against dollar

Mumbai, May 19 (PTI) The rupee descended for the eighth consecutive session and ended 50 paise down at its lowest-ever level of 96.70 against the US dollar on Tuesday, weighed down by soaring crude oil prices, persistent foreign capital outflows, and a resilient dollar buoyed by global risk-aversion.

Rupee, Asia’s worst-performing currency, has lost Rs 2.48 or 2.64 per cent versus the greenback in the past eight sessions since the closing level of 94.22 recorded on May 7.

Forex traders attributed the domestic currency’s steep fall to rising crude oil prices and global supply chain disruptions due to the closure of the Strait of Hormuz.

At the interbank foreign exchange market, the rupee opened at 96.38 against the US dollar and touched the intraday

high of 96.27 during the session.

At the end of the session, the Indian currency was quoted at its historic low of 96.70 against the dollar, recording a steep fall of 50 paise from its previous closing level.

On Monday, the Indian rupee settled at 96.20 against the US dollar.

Anuj Choudhary, Research Analyst, Commodities Research, Mirae Asset Sharekhan, said a strong dollar and rising US treasury yields amid the ongoing geopolitical tensions and FII outflows led the rupee to the negative territory.

“However, any intervention by the RBI and certain restrictions on the import of gold and silver may support the rupee at lower levels. USD-INR spot price is expected to trade in a range of 96 to 96.60,” Choudhary said.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading at 99.24, higher by 0.05 per cent due to simmering Iran tensions.

Brent crude, the global oil benchmark, was trading down 1.92 per cent at USD 109.95 per barrel in futures trade.

Traders said that emerging market economies, including India, continue to feel the pressure of rising crude oil prices, as elevated rates accelerate the outflows of US dollars, along with the withdrawals of funds by foreign portfolio investors.

Meanwhile, US President Donald Trump has said he halted fresh strikes on Iran at the request of Qatar, Saudi Arabia and the UAE, asserting that serious discussions were underway with Tehran that could lead to an acceptable deal.

Trump said he was asked by Saudi Arabia, Qatar, the UAE and some others if the US could put it off for 2 or 3 days, a short period of time, because they think that they are getting very close to making a deal.

On the domestic equity market front, Sensex declined 114.19 points to settle at 75,200.85, while Nifty dipped 31.95 points to 23,618.

Foreign Institutional Investors turned net sellers after three sessions of buying and offloaded equities worth Rs 2,457.49 crore on Tuesday, according to exchange data. PTI DRR HVA