Rupee hits 71-mark for the first time, on course for biggest monthly fall in 3 years

The rupee continued its downslide to fall to yet another low on Friday, hitting 71 against the US dollar for the first time ever. After shedding 15 paise to end at 70.74 against the US dollar on Thursday, the rupee slid further to open at 70.95 per dollar on Friday, and hit the 71-mark in intra-day trade. The domestic unit is set for its biggest monthly fall in three years, according to Bloomberg. At 10.33 am, the rupee was trading 21 paise, or 0.30% lower at 70.95 against the US dollar.
Rising crude oil prices and an increased demand for the dollar contributed to the rupee’s slump. A weakening trajectory in developing market currencies, like the Indonesian rupiah which fell to a two-decade low on Friday, also put pressure on the rupee. Countries like Turkey and Argentina, with wide current account deficits, are also witnessing a similar currency meltdown. The rupee is Asia’s worst performing currency this year, according to Bloomberg data. Benchmark Brent crude oil was at US $78 a barrel in early Asian trade.
Rising inflation fears due to surging crude oil prices, and the uncertainty ahead of June-quarter GDP growth data due to be announced later in the day kept pressure up on the rupee. Equity markets, meanwhile, were flat in trade after opening higher on Friday. The benchmark BSE Sensex was trading 0.03% or 11.37 points lower at 38,678.73 at 10.45 am, while the broader NSE Nifty was trading below the 11,700 mark at 11,680.00.