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Rupee hits new all-time low of 70.32
Why in the news ?
- The Indian rupee on Thursday 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.
Details
- 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.
- Widening trade deficit amid heightened global uncertainty is likely to keep the INR (rupee) under pressure.
- Trade deficit soared to a near five-year high of USD 18 billion.
- 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.
- In recent months, global activity indicators such as global PMI and world trade volumes have moderated.
- This along with an overvalued rupee could weigh on India’s exports and thus growth recovery.
Source
The Hindu.