The Indian rupee remained lower against the U.S. dollar on Friday, after plunging to a lifetime low yesterday on higher crude oil prices and consistent outflow of foreign funds from the domestic equity market.
The rupee breached the 71-mark against the dollar and was trading at 71.05. Yesterday, the currency had plunged to an all-time low of 71.21 against the greenback.
So far this year, the rupee has fallen almost 11.8 percent against the U.S. dollar.
The persistent fall in the rupee is due to domestic dollar demand from oil importers, as well as weak global cues stemming from U.S.-China trade tensions.
U.S. President Donald Trump in an interview with Bloomberg News said the U.S. intends to move ahead with plans to impose tariffs on $200 billion in Chinese imports as early as next week.
Trump also threatened to pull out from the World Trade Organization and called European trade policies “almost as bad as China,” raising fresh worries over trade friction.
Besides the rupee, the cautious mood resulted in weakness in emerging market currencies such as Argentina’s peso, Brazilian real and the Turkish lira.
Earlier in the week, Indian Economic Affairs Secretary Subhash Chandra Garg had remarked that the depreciation in the rupee was due to some small mismatch in the demand and supply and the currency was fairly stable at current levels.
Indian markets were mixed, with the benchmark BSE Sensex ending down 45.03 points or 0.12 percent at 38,645.07, while the broader Nifty index closed marginally higher at 11,680.50.
Investors await the release of India’s GDP data for the April-June quarter after market hours for more direction.