Rupee plummets to historic low of 70.09 on Turkish lira collapse

Mumbai, August 14

Reversing all its early gains, the rupee on Tuesday collapsed to a life-time low of 70.09 against the US dollar, falling 16 paise amid fears that Turkish economic crisis could lead to a global financial meltdown.

The ongoing currency turmoil in Turkey has dampened investors’ sentiments globally. Investors are turning to dollar as safe haven with Turkeys currency lira crisis continuing since the last week.

On Monday, the rupee had plunged by Rs 1.08, or 1.57 per cent, to a record low of 69.93 against the US currency.

The central government blamed "external factors" for the rupee's fall to an all-time low against the US dollar and said that there is nothing to worry.

Economic Affairs Secretary Subhash Chander Garg said on Tuesday external factors may ease going forward.

"Rupee is depreciating due to external factors," he said. There is "nothing at this stage to worry".

SBI Chairman Rajnish Kumar said all currencies have weakened against the dollar, but the Indian currency has not weakened very much in comparison to other currencies.

"I feel that it (rupee) should stabilise between 69 and 70 because if you look at the numbers for investment which is coming into the country—investment in bonds, investment in equities—this level has become attractive for foreign investment," Kumar said.

Research Analyst at Anand Rathi Shares and Stock Brokers, Rushabh Maru said the rupee extended losses on Tuesday on account of panic demand from importers.

"Given the uncertainty surrounding Turkey crisis and strength in the dollar index, importers are buying dollars aggressively. The RBI has been intervening very selectively in the market. Hence, an absence of aggressive intervention by the RBI has spooked the market," he said. PTI