The Indian rupee, which has been facing headwinds caused by a rise in crude oil prices and a hardening United States dollar, continued its slide against the USA currency on Monday.
Mumbai: Rerversing all its early gains, the rupee on Tuesday collapsed to a life-time low of 70.09 against the USA dollar, falling 16 paise amid fears that Turkish economic crisis could lead to a global financial meltdown.
The under-pressure rupee touched 70.09 briefly during mid-morning trade as fears grow that the plight of Turkey's lira will spread to other emerging countries.
"There is nothing to worry at this stage".
"The Indian rupee just gave the Supreme Leader a vote of no confidence, crashing to a historic low", Rahul Gandhi, president of the main opposition Congress party, said in a tweet referring to his rival Modi.
B Prasanna of ICICI Bank said the rupee is the victim of a contagion effect impacting all emerging markets (EMs) triggered by the Turkish crisis.
The fall in the rupee is leading to a widening of India's current account deficit, when the value of imports exceeds the value of exports, they say.
"Given the uncertainty surrounding Turkey crisis and strength in the dollar index, importers are buying dollars aggressively". While the government has blamed "external factors" for the rupee's fall to an all-time low against the U.S. dollar and said there is nothing to worry, the Opposition has come all out with their opinions on Twitter.
He said the RBI has spent about $23 billion so far to intervene in the market.