Rupee Falls Below 72-Mark Against Dollar On Currency Rout
The rupee on Monday declined by 36 paise to close below the 72 level against the U.S. currency for the first time in nine months, hit by a flash crash in global currencies due to uncertainty over the trade front.
The rupee settled down by 36 paise at 72.02 to the U.S. dollar, the lowest closing level since Nov. 14, 2018, even as equities spurted more than 700 points at close on stimulus measures.
The local currency had retreated to a low of 72.25 in day trade following a flash crash in currencies such as Turkish lira, Chinese yuan, and Australian dollar against the U.S. dollar.
The global currencies faced a meltdown in the overnight trade due to the escalation between the U.S. and China over the weekend. The dollar index, which gauges the greenback’s strength against a basket of six currencies, rose 0.31 percent to 97.94 after the euro and the pound dropped.
However, reassuring comments by the world’s two largest economies on Monday that they are willing to resolve issues through calm negotiations helped the currencies pare their losses.
The assurance also supported the crude oil prices with the benchmark Brent crude gaining 0.64 percent to $59.72 per barrel.
Chinese Vice Premier Liu He said that his country was willing to resolve the trade dispute with the U.S. through “calm” negotiations.
U.S. President Donald Trump said that the U.S. and Chinese trade negotiators would “very shortly” resume talks in what he described as a breakthrough in the two economic superpowers' trade war.
The comments triggered a rally in stock markets with the BSE Sensex surging by 792.96 points to 37,494.12, led by gains in banking stocks.
Foreign investors remained net sellers in the equity market offloading stocks worth Rs 752.9 crore on a net basis on Monday.
The 10-year Indian government bond yield was down at 6.49 percent.