The Indian rupee slid to a historic low against the U.S. dollar in evening deals on Tuesday, with higher oil prices, trade worries and rising U.S. interest rates undermining investor sentiment.
Oil prices rose as falling Iranian output tightened global supply. Iran’s oil exports are expected to decline by up to 40 percent once the U.S. sanctions on Iran come back into effect on November 4.
Trade war worries persisted as U.S. President Donald Trump remarked that he was preparing to slap tariffs on almost all goods imported from China. China had vowed to retaliate against any such tariffs.
Media reports quoted unnamed Finance Ministry officials as saying that steps would be taken to rein in rupee weakness, including deposit schemes for non-resident Indians along with central bank intervention.
Indian markets also finished lower, with the benchmark BSE Sensex falling 1.34 percent or 509 points to 37,413, while the broader Nifty slumped 1.32 percent or 150.60 points to 11,288.
Breaking the key 72.5 level, the Indian rupee depreciated 2.9 percent to a record low of 72.84 against the greenback. The pair was worth 70.81 when it closed deals on Monday.
So far this year, the rupee has weakened almost 11 percent against the U.S. dollar.
Investors await India’s consumer inflation and industrial production data on Wednesday for directional clues.