Finance
Ahead of the Reserve Bank’s monetary policy announcements on Wednesday, the rupee fell precipitously by 30 paise to 86.56 against the US dollar in early trading, marking the fourth consecutive session of losses.
Despite a sharp decline in crude oil prices and a depreciating US dollar, forex traders claimed that the impending global trade war was still causing people to withdraw their money, leaving the stock markets in shock.
In early trades, the rupee strengthened slightly to 86.56 versus the US dollar after opening at 86.52 and falling as low as 86.60 at the interbank foreign exchange. This was still a steep decline of 30 paise from the previous closing level.
The rupee fell 50 paise versus the dollar on Tuesday, ending the day at 86.26. This was the rupee’s biggest one-day drop since it dropped 66 paise on January 13. The rupee fell 32 paise on Monday and 14 paise on Friday in the previous two days.
The dollar index, which measures the strength of the US dollar relative to a basket of six other currencies, was down 0.59 percent at 102.09.
In futures trading, Brent crude, the world’s benchmark for oil, fell 3.63 percent to its lowest level ever, USD 60.50 per barrel.
Investors are anticipating the Reserve Bank of India’s policy announcements on the macroeconomic front at home. The three-day discussion on key interest rates by the RBI’s monetary policy committee, overseen by Governor Sanjay Malhotra, started Monday and is expected to conclude on Wednesday.
With the 30-share BSE Sensex dropping 433.92 points, or 0.58 percent, to 73,793.16, and the Nifty quoted 158.60 points, or 0.70 percent, down at 22,377.25 points, stock market benchmarks that had recovered from record low levels the previous session were once again trading lower.
Both indices plummeted more than 5% on Monday before finishing about 3% down.
Foreign institutional investors (FIIs) offloaded equities worth Rs 4,994.24 crore on a net basis on Tuesday, according to exchange data.
Source: IE
