Rupee plunges by 41 paise to record low of ₹79.36 against US dollar

India’s merchandise exports in June rose by 16.78% year-on-year to $37.94 billion while the trade deficit ballooned to a record $25.63 billion on account of a steep increase in gold and crude oil imports

The rupee fell by 41 paise to close at a fresh lifetime low of ₹79.36 against the US dollar on Tuesday amid a strong greenback overseas and unrelenting foreign fund outflows.

At the interbank forex market, the rupee opened at ₹79.04 against the greenback and witnessed an intra-day high of ₹79.02 and a low of ₹79.38.

It finally settled at ₹79.36 (provisional), down 41 paise over its previous close. On Monday, the rupee had closed at ₹78.95 against the US dollar.

The Indian rupee hit a fresh record low against the US Dollar on Tuesday on the back of a stronger dollar and weaker-than-expected domestic data, said Anuj Choudhary - Research Analyst at Sharekhan by BNP Paribas.

India’s merchandise exports in June rose by 16.78% year-on-year to $37.94 billion while the trade deficit ballooned to a record $25.63 billion on account of a steep increase in gold and crude oil imports, according to the government’s preliminary data released on Monday.

“Rupee is expected to trade on a negative note on a firm tone in the US Dollar, elevated oil prices, and weak global market sentiments,” Choudhary said.

The dollar may strengthen on expectations of aggressive rate hikes by the Federal Reserve, Choudhary said, adding that the hike in import duty on gold may support the rupee to some extent as it may dent import demand for gold. Rupee may trade in the range of ₹78.50-80 in the next couple of sessions.