The Indian rupee today plunged to a fresh record low of 70.40 a dollar after the country’s trade deficit widened to a five-year high as petroleum imports surged. At 1.23pm, the rupee was trading at 70.36 a dollar, down 0.55%, from its Tuesday’s close of 69.89.
The currency opened at 70.25 and touched an all time low of 70.40 a dollar. On Wednesday, markets were closed due to Independence Day. The 10-year bond yield stood at 7.875%, from its previous close of 7.818%. Bond yields and prices move in opposite directions.
Forex dealers said besides strong demand for the American currency from importers, capital outflows mainly weighed on the domestic currency. 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.
So far this year, the rupee has weakened 9.15%, while foreign investors have sold $140.10 million and $5.34 billion in equity and debt markets, respectively.