Rupee hits 71-mark for first time ever, drops 26 paise against US dollar

Mumbai, August 31

The rupee slumped to a fresh record low of 71 against the dollar for the first time ever by falling 26 paise on persistent demand for the US currency amid rising crude prices.

At the Interbank Foreign Exchange (Forex) market, the local currency opened lower at 70.95 a dollar and slipped further to hit its lifetime low of 71 from its previous close of 70.74.

Forex dealers said besides robust month-end demand for the American currency from oil importers, dollar’s strength against its rival currencies on expectations of rising interest rates amid lingering Sino-US trade tensions, weighed on the domestic currency.

On Thursday, the rupee slid further by 15 paise to close at a fresh lifetime low of 70.74 to the dollar due to strong demand for the greenback from oil importers and surging crude oil prices stoking inflation fears.

Growing fears about rising inflation amid high global crude oil prices and consistent outflow of foreign funds from the domestic equity market also weighed on the domestic currency.

Benchmark Brent crude oil was at USD 78 a barrel in early Asian trade.

Meanwhile, the BSE Sensex fell 78.64 points, or 0.20 per cent, to 38,611.46 points in opening trade. PTI