Rupee falls by 23 paise to settle at new low of 91.01/$

Mumbai: The rupee fell 23 paise against the greenback to settle at a new all-time low of 91.01 (provisional) on Tuesday, as the government in the Rajya Sabha attributed the sliding value of domestic currency to widening trade deficit and the ongoing developments related to the India-US trade agreement.

During the session, the local unit lost 36 paise from its previous close against the greenback to hit its lowest-ever level of 91.14, but regained some ground later in the day. Even a weaker greenback and a sharp decline in global crude oil prices could not prevent the slide in the local unit, forex traders said.

The rupee has fallen from 90 a dollar to 91 in the last 10 trading sessions. The unit has slipped 1 per cent against the greenback in the past five sessions alone.

The issue was brought up in the Rajya Sabha on Tuesday, and Minister of State for Finance Pankaj Chaudhary said, “During the current financial year, the depreciation of the Rupee has been influenced by the increase in trade deficit and likely prospects arising from the ongoing developments in India’s trade agreement with the US, amid relatively weak support from the capital account.”

“The depreciation of currency is likely to enhance export competitiveness, which in turn impacts the economy positively. On the other hand, depreciation may raise the prices of imported goods. However, the overall impact of exchange rate depreciation on domestic prices depends on the extent of the pass-through of international commodity prices to the domestic market,” he said.