Rupee closes at new all-time low of 70.16

The rupee on Thursday slid 26 paise to close below the 70-mark for the first time against the US currency, hammered by strong dollar demand amid growing concerns over widening trade deficit.

The rupee collapsed to a historic intra-day trading low of 70.40 before closing at fresh life-time low of 70.15 per dollar, down by 26 paise or 0.37 per cent over the previous close.

The RBI intervened in the currency market to save the beleaguered currency, currency traders said.

Emerging market currencies and stocks remained in the investors’ cross hairs as worries mounted despite fresh rally for the Turkish lira.

The lira continued to rebound from record losses a day after Qatar pledged $15 billion in investments to help the Turkey’s economy.

Headwinds in the form of widening trade deficit due to surging crude prices amid unsupportive global factors kept forex sentiment shaky and largely weighed on the local unit. Country’s trade deficit soared to a near five-year high of $18 billion, data released on Tuesday showed.

A massive exodus of capital outflows from both equity and debt market against the backdrop of US Federal Reserve’s anticipated interest rate policy is triggering wide panic, a forex dealer said.

High current account and fiscal deficits mean the central bank may have little room to tap into its reserves to defend the currency, the dealer said.

The rupee has lost 10.5 per cent of its value this year so far against the backdrop of India’s ballooning fiscal deficit and crude prices and mounting worries surrounding the US-China trade conflicts.