NEW DELHI — The Indian rupee plunged to a new record low against the US dollar on Monday amid rising global fuel prices and trade tensions.
It traded at 72.67 against the American unit in the afternoon.
India’s widening trade deficit and global economic factors, including higher oil prices and escalating tariff tensions between the United States and China, are weighing on the local currency.
The country’s current account deficit in the April-June quarter was US$15.8 billion compared with US$15 billion in the same quarter of the previous financial year, Reserve Bank of India (RBI) data showed on Friday.
The rupee settled on Friday at 71.73 after recovering 26 paise due to intervention by the RBI in the foreign exchange market.
This central bank support was not seen on Monday, however, according to local media.
Indian economic affairs secretary Subhash Chandra Garg has tried to calm concerns about the rupee’s fall.
“I have maintained that 68-70 perhaps is the right level and I don’t expect it to go beyond. There may be some temporary factors that came into play last week but there is no fundamental justification,” Garg told the Economic Times newspaper.
“Seventy-two to a dollar is perhaps an outer limit or beyond the reasonable outer limit for depreciation and those operators who are trying to take advantage of this contagion feeling in emerging markets may come to grief later,” he said.
