Rupee freefall continues as it tumbles 72 paise against dollar
Strong demand for US currency from importers and banks weighed on the Indian currency, which fell 72 paise during morning trade on Monday
The Indian currency has continued its weak run with the rupee opening at a new low of 72.15 against US dollar on the Interbank Foreign Exchange (Forex) market on Monday, down from a close of 71.72 on Friday.
Hit by strong demand for the American currency from importers and banks, the rupee slumped to a new record low of 72.18 in early trade on Monday, plunging nearly 45 paise from its last close.
During late morning deals, it slid further to 72.46, thus losing 72 paise. The rupee had earlier hit a record low of 72.11 on September 6.
Surging crude oil prices have buoyed demand for the US currency among Indian oil refiners.
On Friday the Reserve Bank of India had intervened to bolster the sagging rupee and it had staged a turnaround.
The dollar’s strength against rival currencies overseas and fears of a possible escalation in the US-China trade conflict also put pressure on the rupee.
Meanwhile, global rating agency Moody’s Investors Service has said that a sustained weakening of the rupee would be credit negative for rated Indian companies, Business Standard reported.
It would have an adverse impact particularly on those entities that generate revenue in rupees, but rely on US dollar debt to fund their operations and have significant dollar-based costs, including capital expenses, it said.