The Indian rupee hit a fresh record low against the US dollar on Tuesday as the American currency strengthened globally amid weakness in the global equities. At the interbank foreign exchange market, the partially convertible rupee hit a record low of 79.66 against the US dollar.
The rupee closed at 79.60 (provisional) on Tuesday against its previous day’s close at 79.45 against a dollar. The American currency has strengthened against major global currencies.
The Euro fell to a low of 1.00005 against the US dollar, the lowest level since 2002. The euro has fallen almost to parity with the dollar for the first time in two decades. The US dollar has strengthened against major global currencies amid a slump in the equities markets.
The Indian equities markets’ key indices slumped by around one per cent on Tuesday dragged by heavy selling pressure in IT, infra and banking stocks amid weakness in the global markets. The 30 stock S&P BSE Sensex slumped 508.62 points or 0.94 per cent to 53,886.61 points against its previous day’s close at 54,395.23 points.
The broader Nifty 50 of the National Stock Exchange tumbled 157.70 points or 0.97 per cent to 16,058.30 points against its previous day’s close at 16,216.00 points. Widening trade deficit has put pressure on the value of the Indian currency. As per data released by the Ministry of Commerce & Industry recently, India’s trade deficit widened to $25.63 billion in June. For the first quarter of the current financial year, the trade deficit has widened to $70.25 billion.
The country’s trade deficit has widened due to high imports. India’s merchandise imports in April-June 2022-23 period stood at $187.02 billion, an increase of 47.31 per cent over $126.96 billion in April-June 2021-22. In the first quarter of the current financial year, India’s merchandise export rose to $116.77 billion, recording an increase of 22.22 per cent over $95.54 billion recorded in April -June 2021-22.
India’s merchandise exports rose by 16.8 per cent to $37.9 billion in June 2022, while imports soared by 51.02 per cent to $63.58 leading to a trade deficit of $25.63 billion during the month.
