August jinx continues as Re sees biggest fall in 6 yrs

The 'August Jinx' continued for the Indian currency as rupee witnessed its worst fall in the past six years, as foreign investors' pulling out of Indian markets escalated over rising tensions in conflict-torn Jammu and Kashmir (J&K).

During the day's trade, the rupee crashed by 116 paise against the greenback, amid week global cues and domestic indicators -- both political and economic --- that made rupee slide past 70-mark once again.

Of the four biggest falls in Indian currency, three have come in the month of August. This is the biggest ever loss of rupee in the past six years. The last time rupee had depreciated so much during a day's trade was way back on August 29, 2013. On that day, owing to the 'taper tantrum', the rupee had slumped to a Rs 2.64, is the steepest since July 4, 1991. Last year, on August 14, 2019, the rupee had lost 110 paise against the US currency.

In a highly volatile trade, the rupee opened at 70.20 at the forex market and traded in the range of 70.74 and a high of 70.18 against the American currency.

The domestic currency closed at 70.74 against the American unit, down 116 paise over its previous closing price. The rupee had settled at 69.60 against the US dollar on Friday.

Besides the US-China trade-related concerns, Home Minister Amit Shah moving a resolution in Rajya Sabha that all clauses of Article 370 will not be applicable to Jammu and Kashmir kept the pressure on the Indian rupee, the forex traders said. During the day, the foreign investors pulled out a whopping Rs 2,016.73 crore out of the Indian markets, as domestic tensions escalated in India.

Shah, on Monday, after days of speculation, announced the abrogation of Articles 35A and 370 -- that grant valley a special status.

The fall in the rupee happened despite easing crude oil prices and weakening of the American currency vis-a-vis other currencies overseas supported the local unit to some extent.