Rupee plunge continues, crashes to all-time low of 70.08 against United States dollar

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The Indian rupee on Tuesday morning fell to a record low of 70 against the United States dollar.

Forex dealers said selling of the greenback by banks and exporters supported the rupee.

"The RBI was there to curtail the volatility in early trade, but not in a big way", said a senior dealer at a foreign bank. The fall in Turkish Lira has spread the fears that the economic slump in Turkey could spread to other economies.

In early Asian trade, the Turkish unit was at 6.91 to the dollar and 7.89 to the euro, well off the 7.24 to the dollar and 8.12 to the euro seen yesterday but still uncomfortably high.

Aaditya Thackeray, president of the Shiv Sena's youth wing, Yuva Sena put out tongue-in-cheek comments in two tweets on the rise of the rupee which he compared to 71 years of Independence tomorrow (15 August 2018), and said "at 71 years of Independence, we are touching 70". The 10-year benchmark bond yield rose to 7.80 per cent from its previous close of 7.75 per cent, tracking the weakness in rupee.

On Monday, the rupee had plunged by Rs 1.08, or 1.57 per cent, to a record low of 69.91 against the USA currency amid fears that Turkish currency turmoil could turn out into global financial crisis.

Traders will also watch out for India consumer inflation data for July due after market hours for further direction. There is "nothing at this stage to worry", Economic Affairs Secretary Subhash Chandra Garg said. Tuesday's session marked the rupee sliding to as much as 70.10 against the American currency.

"Even if the rupee falls to 80, it will not be a concern provided all other currencies depreciate."
The RBI has been intervening very selectively in the market.

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