The rupee reaches the minimum of 6 months of 71.40 against the dollar; 62 countries plunge into global turmoil
NEW DELHI: The sunken rupee On Tuesday, 62 are closed to close at a minimum of almost six months of 71.40 against the US dollar in line with the battered shares as the turmoil of the global market and the collapse of the Argentine currency led investors to safe havens.
In the interbank exchange, the rupee It opened at 71.15 and touched a maximum of 71.02 and a minimum of 71.40 against the US currency during the day.
The domestic unit finally settled 62 paise lower at 71.40 against the US dollar. The rupee had closed at 70.78 against the American currency on Friday.
Currency markets closed on Monday on behalf of Eid al-Adha.
The national currency has lost 71 countries in the last two sessions.
The domestic foreign exchange market that was already fighting outflows of foreign funds for some time has been more pressured due to the monetary crisis in Argentina and the concerns of the world trade war.
The Argentine peso collapsed on Monday after the country's center-right leader, Mauricio Macri, had a poor performance in the primary elections.
Continuing with its bearish outlook, foreign investors sold Indian shares worth Rs 638.28 rupees in net terms on Tuesday, according to exchange data.
Meanwhile, the BSE sensex reference value was set at 623.75 points, or 1.66 percent, at 36,958.16; and the NSE Nifty fell 183.80 points, or 1.65 percent, to 10,925.85.
Reflecting the global risk sentiment, stock exchanges around the world fell today due to fears over a prolonged trade war between China and the United States, protests in Hong Kong and a collapse in the Argentine peso currency led to investors to safe ports such as bonds, gold and yen, said VK Sharma, head of PCG and capital market strategy, HDFC Securities.
Sharma also said that Yen has strengthened this month amid the growing signs that the United States and China will not reach a rapid resolution in their one-year trade war.
According to Rushabh Maru, research analyst - currency and commodity, Anand Rathi Shares and Stock Brokers: "The rupee remains under pressure as the Chinese Yuan continues to weaken. Emerging markets currencies especially steep fall in Argentina's peso along with ongoing protest in Hong Kong are matter of concern for the global markets."
Argentina is currently in recession and registered 22% inflation during the first half of the year, while poverty now affects 32% of the population.
Maru also said that the way in which the yields of US Treasury bonds at 10 and 30 years are falling, there are alarming and horrifying indications about the state of the global economy.
According to Maru domestically, after weak reading of IIP data, focus will now shift to CPI and trade balance data. "Overall the rupee may gradually head towards 72 mark in the short term," he said.
Brent crude futures, the global benchmark for oil, fell 0.19 percent to $ 58.46 per barrel.
The dollar index, which measures the strength of the dollar against a basket of six currencies, was 97.37.
Meanwhile, the 10-year government bond yield was 6.53 percent on Tuesday.
Financial Benchmark India Private Ltd (FBIL) set the reference rate for the rupee /dollar at 70.5185 and for rupee /euro at 78.9069. The reference rate for rupee /British pound was fixed at 85.6085 and for rupee /100 Japanese yen at 66.58.