Rupee Falls Sharply To Close At Record Low Against Dollar

Rupee Falls Sharply To Close At Record Low Against Dollar

Rupee Falls Sharply To Close At Record Low Against Dollar

A customer hands rupee notes to an attendant at a fuel station in Mumbai, August 13, 2018. Experts believe that a possible intervention by the Reserve Bank of India (RBI) could have stemmed the rupee's fall. The rupee has been suffering due to turmoil in the Turkey currency market raising concerns that it may impact financial institutions in Europe. The rupee traded in the range of 69.93-69.41 against the American currency before closing at the day's lowest point.

Nervous investors were keeping an eye on developments in Ankara after yesterday's bloodletting that saw the lira hit record lows against the dollar and euro, and equity markets go into freefall on concerns Turkey's financial crisis could spread globally. There is "nothing at this stage to worry".

The fall in the rupee is leading to a widening of India's current account deficit, when the value of imports exceeds the value of exports, they say.

The US dollar exchange rate with the lira has traded between 6.6 and 6.8 for most of today's session after briefly spiking above 7 on Monday.

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However, Economic Affairs Secretary Subhash Chander Garg said external factors may ease going forward.

The currency crisis has been observed across Asian markets, causing a weakening in domestic equities, sparked majorly by the Lira crisis.

The crisis has been sparked by a series of issues including a faltering economy - the central bank has defied market calls for rate hikes - and tensions with the United States, which has hit Turkey with sanctions over its detention of an American pastor.

Investors preferred safe-havens such as the USA dollar and the yen after a plunge in the Turkish Lira sent all emerging market currencies sharply lower.

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