The Indian rupee hit a record low on Tuesday, touching 70.08 against the US dollar in morning trade, before recovering slightly to close at 69.89. The currency touched a high of 69.75 before falling to 70.08 at 10.34 am, Mint reported. The rupee is down nearly 8.7% so far this year, making it the worst-performing currency in Asia.
The government has blamed external factors for the depreciation, which it said will ease going forward, PTI reported. There is “nothing at this stage to worry”, Economic Affairs Secretary Subhash Chandra Garg said. He claimed that he will not worry even if the rupee fell to 80 per dollar, as long as other currencies also slump.
Analysts cited the slump in Turkish lira as one of the key reasons for the rupee falling further, Money Control reported. The Turkish currency crisis has strained emerging market currencies such as India.
The currency closed at 69.93 on Monday against its Friday’s close of 68.83, which was a biggest single session decline against the dollar since September 3, 2013.
Meanwhile, Indian benchmark indices gained on Tuesday after retail inflation eased to 4.17% in July from 4.92% in June. Asian stocks mostly steadied on Tuesday as the impact of the economic crisis in Turkey was relatively contained in developed markets overnight, Mint reported.
BSE’s Sensex closed 207.10 points higher at 37,852, while Nifty 50 ended 79.35 points up at 11,435.10. Sun Pharmaceuticals, Yes Bank, ICICI Bank, Axis Bank and Reliance Industries were the top gainers on Sensex, while the stocks of Hero Motocorp, Larsen and Toubro, Adani Ports, Bharti Airtel and NTPC declined.
On Nifty 50, Sun Pharmaceuticals, Yes Bank, Lupin, Cipla and Bajaj Finance performed well, while UPL Limited, Adani Ports, Hero Motocorp, Bharti Airtel and Hindustan Petroleum were the top losers.
Turkish currency crisis
The currency crisis in Turkey, which had a massive impact on Asian markets on Monday, began after President Recep Tayyip Erdogan asked citizens to exchange gold and dollars into the lira as the country’s currency dropped nearly 19% due to worsening relations with the United States.
On August 10, US President Donald Trump announced higher tariffs on metal imports from Turkey. Two days later, Erdogan accused foreign countries of waging a war on Turkey. He said his government would take appropriate trade measures to counter the Trump administration’s plan.