The rupee slumped to an all-time low of 69.91 per dollar, tracking broader weakness in other emerging market currencies due to concerns of a spill-over from a crisis-hit Turkey.
The rupee resumed at 68.61 against last Friday’s closing level of Rs 68.83 at the interbank foreign exchange market. The Indian unit slumped to all-time historic low of 69.91. It hovered in a range of 69.91 and 68.41 before ending the session at 69.91. The rupee’s previous record low was 69.13, marked on July 20.
According to forex dealers, the Reserve Bank of India was seen intervening to stem a sharp fall in the rupee. “The RBI was there to curtail the volatility in early trade, but not in a big way,” said a senior dealer at a foreign bank.
Meanwhile, the 10-year benchmark bond yield rose to 7.80 per cent from its previous close of 7.75 per cent, tracking the weakness in rupee.
Investors preferred safe-havens such as the US dollar and the yen after a plunge in the Turkish lira sent all emerging market currencies sharply lower. The lira has fallen about 45 per cent against the greenback this year on worries over Turkish President Tayyip Erdogan's increasing control of the economy and a deepening diplomatic rift with the United States.
“There is no point spending a lot of dollars in defending a rupee when the force of the fall is so strong across emerging markets,” said a senior forex dealer at an Indian state-run bank.
Traders will also watch out for consumer inflation data for July due after market hours for further direction. A Reuters poll estimates July inflation of 4.51 per cent compared with a five-month high of 5.0 per cent hit in the previous month.