Rupee opens lower even after govt’s steps to stem fall

Rupee opens lower even after govt’s steps to stem fall

The dollar rose against a basket of major currencies overseas, with investors cautiously awaiting news on the implementation of US tariffs on an additional USD 200 billion of Chinese imports, forex dealers said. Reuters File Photo

The rupee Monday opened lower by 67 paise at 72.52 against a dollar after Friday’s close at 71.85. The government’s steps on Saturday to check the fall of rupee appeared to have little impact on the Indian currency weighed down by global headwinds.

Market benchmark BSE Sensex too opened 306 points lower to 37,784 and Nifty index dropped 97 points to 11,417 on the back of rupee extending losses.

The new headwinds for the market could be the likely move by US President Donald Trump to impose fresh tariffs on Chinese import Monday. According to the US media, the final details of new tariffs were being worked out.

Meanwhile, the Centre on Saturday had taken a slew of measures including the removal of withholding tax on Masala bonds, relaxation for portfolio investors and curbs on non-essential imports to contain rising Current Account Deficit and stem the fall of rupee against the dollar.

However,  critics had flayed the Centre’s measures as negative from a long-term perspective. “HDFC Bank in a report said the government's rupee depreciation arresting measures announced Friday may not drive fund inflows and are a negative from a longer-term perspective as they increase short-term debt”.

India’s premier exporters organization FIEO too was quick to criticize the decision to curb non-essential imports among others.

The Indian rupee has fallen more than 13% this year and is Asia’s worst performing currency.