Rupee dives 29 paise to 6-month low of 65.49

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MUMBAI: The rupee on Monday plunged by 29 paise or 0.44 per cent to close at a six-month low of 65.49 against the US currency on widening trade deficit concerns amid heightened geopolitical worries.

The Indian unit was the biggest loser among Asian currencies which suffered due to a strong US dollar after the strike on Syria by the US, the UK and France.

Among Asian currencies, Chinese yuan and Singapore dollar dropped 0.1 per cent, the Philippine peso and Malaysia’s ringgit declined up to 0.2 per cent against the dollar following hopes that the strikes would not lead to a broader escalation in the conflict. The rupee resumed on a bearish note at 65.30 per dollar from previous close of 65.20 at the inter-bank foreign exchange (forex) market.

After trading in a narrow range during the early part of the day, the home currency drifted sharply in mid-afternoon deals to hit a fresh intra-day low of 65.51 before concluding the day at 65.49, revealing a steep loss of 29 paise, or 0.44 per cent.

This is the lowest closing since October 3, 2017, when it had settled at 65.50 against the US dollar.

The US Treasury Department added India to its watch list of countries with potentially questionable foreign exchange policies, joining China and four others which impacted overall forex trading mood, traders said.

The twin shocks of country’s trade deficit hitting $13.69 billion and exports dipping after a gap of four months in March weighed on the rupee.

Capital outflows too added pressure even as importers rushed to cover their unhedged positions.

According to exchange data, foreign investors withdrew ?308.13 crore from capital markets on Monday.

On the global energy front, crude oil prices edged higher after last week’s bullish surge as the markets became more relaxed about Syria and eyed more production increases in the US.

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