The rupee on Monday logged its worst performance in over three months, as it depreciated by 88 paise or 1.2% against the US dollar.
In the early morning trade, the rupee opened lower at 69.87 and fell further to settle lower by 88 paise to close at 70.46, its biggest single-day loss since August 13. Earlier on Friday, the rupee had strengthened by 27 paise to close at a four-month high of 69.58 against the greenback.
On August 13, it had closed at Rs 69.93, its weakest ever back then. The 1.56% decline on that day was also the currency’s sharpest single-day fall since September 2013. The rupee had tumbled by 109 paise on that day.
The fall in the rupee was triggered by the weak GDP growth numbers and the rising crude oil prices. Crude oil prices surged over 3.85% to $61.75 per barrel in global markets. Last weak, the government informed that the GDP growth has slowed down to 7.1% for the September quarter.
According to the forex dealers, the speculation that the Reserve Bank of India is going to hold on to the policy rates at a time when the Federal Reserve has been gradually increasing its policy rates has also contributed to the slide in the rupee.
Some other forex dealers suggested that the greenback had gained strength after the US and China agreed to put off imposition of higher tariffs from January 1 while entering a 90-day period of talks to bring an end to the dispute.
During the day, the rupee was the worst performing emerging market currency after crude oil prices advanced and India’s economic growth in the second quarter missed estimates.
The slide in the rupee happened despite the fact that foreign funds invested Rs 293.12 crore on a net basis in the Indian capital markets. Meanwhile, Financial Benchmark India Private Ltd (FBIL) has set the reference rate for the rupee/dollar at 70.028 for Monday.