As the downward trend for the rupee continues it has now hit a record low of 70.32 against the dollar earlier today (August 16th) reducing 43 paise further from its previous value.
On Tuesday, August 14th the rupee had touched 70.10. against the US dollar. According to Forex dealers, they said that other than the huge demand for the American currency from importers, capital outflows is also the main factor for the drop in the domestic currency.
Also, data released by the commerce ministry earlier in the week showed that the rupee was also impacted by a sharp surge in trade deficit as it soared to a five-year high of USD 18 billion.
India’s ministry of commerce also further added that the depreciation of the Turkish lira against the dollar after Donald Trump imposed the new US imposed tariffs on steel and aluminum imports also added to the pressure on the Indian rupee.
Notably, Subhash Chandra Garg, the Secretary of Economic Affairs was quite calm of the whole situation as he claims there is nothing to worry about as long as the depreciation is in line with other currencies.
He also said that the fall in rupee value against the US dollar was due to “external factors.”
This drop in the value of the Indian Rupee also seemed to have affected the NSE Nifty as it slipped below the 11,400-mark in early trade on selling in real estate, metal, and banking stocks, it also affected the benchmark BSE Sensex as it fell over 207 points.
In the previous session on Tuesday, August 14th, the gauge had gained 207.10 points, however, The 30-share index has now dropped 207.03 points or 0.54% to 37,644.97.
Shedding by 58.15 points, or 0.50% to 11,376.95, the NSE Nifty dropped below the 11,400-mark.
Given that the country’s trade deficit has soared to a high of USD 18 billion in almost 5 years, it had made investors cautious and in turn, the Market sentiment has become weak as well.