Rupee hits new low, slips to 70.26 against US dollar

Rupee breached 70 per dollar mark for the first time on Tuesday.

New Delhi: The rupee on Thursday hit new low by slipping over 40 paise to 70.26 against US dollar amidst widening trade deficit that rose to more-than-five-year high of $18.02 billion in July and the broad rise in the greenback other Asian peers.

At 9.12 am the partially convertible rupee was down 43 paise to 70.32 against US dollar.

Rupee reversed from historic low in its closing trade on Tuesday after touching 71.10 against the US dollar. The Indian currency closed at 69.90 against USD.

Rupee breached 70 per dollar mark in late morning trade on Tuesday amid fears that economic crisis in Turkey could spread to other global economies.

In the opening trade rupee had recovered from all-time low of 69.91 and strengthened by 23 paise to 69.68 against the US dollar. Panic and capitulation overshadowed trading mood as traders and speculators saw no signs that monetary authorities would step into the foreign exchange market to support the domestic unit.

A PTI report said that the ongoing currency turmoil in Turkey has dampened investors' sentiments globally. Investors are turning to dollar as safe haven with Turkeys currency lira crisis continuing since the last week.

On Monday, the Indian currency crashed by a mammoth 110 paise -- its biggest single-day fall in five years -- to end at a lifetime low of 69.93 as the US dollar gained rapid strength. This was the biggest single day fall for the rupee in the past five years. Previously, the rupee had dropped 2.4 per cent or 148 paise in a single day in August 2013.

The Turkish Lira has lost more than 40 percent against the dollar this year, largely due to worries about President Tayyip Erdogan`s influence over the economy, his repeated calls for lower interest rates, and worsening ties with the United States, a Reuters report has said. The currency pulled back from a record low of 7.24 to the dollar on Monday after the central bank pledged to provide liquidity, but it remained under selling pressure and its meltdown caused further unease on global markets.

With Agency Inputs