Mumbai, Aug 31 (IANS) Caution ahead of key macro-economic growth data, coupled with high global crude oil prices, pulled the Indian rupee to a fresh low of 71 to a US dollar on Friday.
According to analysts, the continuous outflow of foreign funds also adversely impacted the rupee’s prospects.
Around 11.30 a.m. the Indian rupee was pegged at 70.97 to a US dollar after it touched 71 — the lowest ever mark — against the greenback.
It opened the day’s trade at the Inter-Bank Foreign Exchange Market at over 70.90 to a US dollar which was below its record low of 70.85 to a greenback.
On Thursday, the Indian rupee closed at 70.74-75 against the US dollar, weaker by 15 paise from Wednesday’s close of 70.59-60 to a US dollar.
“Dollar-Rupee touched life time high of 71 on spot today. Oil prices have been a major factor that has weakened rupee. Brent crude is trading at $78, $2 short of this year’s high,” said Anindya Banerjee, Deputy Vice President for Currency and Interest Rates with Kotak Securities.
“Emerging market currencies are under pressure. Currencies of China, Indonesia, Turkey, Argentina, Brazil, Russia and South Africa are all depreciating.”
Apart from high crude oil, outflow of foreign funds from the Indian equity and bond markets has had an adverse impact on the rupee.
Investment-wise, data from the NSDL on Thursday showed that foreign portfolio investors (FPIs) sold scrip worth Rs 1,379.34 crore.
Besides, caution prevailed ahead of the release of India’s GDP and fiscal deficit data. The key macro-economic data points will be released on Friday.
“Traders are expecting Q1FY18 GDP to slowdown from 7.7 to 7.2-7.4 per cent. A weaker growth and rising inflation augurs poorly for the rupee,” Banerjee told IANS.