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Rupee hits new low, drops 44 paise to reach 73.77 against US dollar

Commerce and Industry Minister Suresh Prabhu will chair an inter-ministerial meeting today to discuss the depreciating rupee and widening trade deficit

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The rupee collapsed to a fresh low of 73.77 against the US dollar Thursday, as global oil prices continued to rise, deepening concerns about the current account deficit and capital outflows. Consistent dollar demand from importers, mainly oil refiners, following higher crude oil prices, kept the rupee under pressure.

Besides, state-owned oil marketing companies have been allowed to raise USD 10 billion from overseas market to meet their working capital needs.

At the interbank foreign exchange, the rupee opened lower and slipped further to a fresh low of 73.77 a dollar against 73.34, a fall of 43 paise.

The domestic currency closed at a record low of 73.34, down by 43 paise or 0.59 per cent on Wednesday.

The international benchmark Brent crude breached the US 86 per barrel level, near its four-year high. 

On Monday, the rupee tumbled 43 paise to end at a near two-week low of 72.91 against the US dollar amid a strengthening greenback and steady capital outflows.Higher US Treasury yields, which rose above the 3 per cent mark, boosted the appeal for the dollar, analysts said.

The dollar rose to near 1-month highs against global currencies.

Meanwhile, Commerce and Industry Minister Suresh Prabhu will chair an inter-ministerial meeting today to discuss the depreciating rupee and widening trade deficit, an official said.

The meeting will deliberate upon ways to address India's trade deficit in goods and pressure on the rupee, the official added.

Representatives from the department of economic affairs, coal ministry, steel ministry, oil ministry and department of pharmaceuticals are expected to attend the meeting.

The meeting assumes significance as the rupee has hit an all-time high of 73.74 against the US dollar, which would raise India's import bill and widen the trade deficit (difference between imports and exports).

The trade deficit was at a five-year high of USD 18.02 billion in July. It came down to USD 17.4 billion in August.

During the April-August period this fiscal, the country's exports recorded a growth of 16.13 per cent, while imports grew by 17.34 per cent.

 

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