MUMBAI: The rupee continues to bleed--for the fourth consecutive day-- tumbling 36 paise to breach the sensitive 91-mark against the dollar for the first time in early Tuesday trade plumbing a low of 91.14, weighed down by sustained FPI selloffs and a lack of clarity on the trade deal with the US. The rupee fell from 90 a dollar to 91 in the last 10 trading sessions. What is more, the value of the rupee lost more than 50% since 2014 when this government came to power promising one-rupee for a dollar.
The local unit has slipped 1% against the greenback in the past five sessions alone and more than 6% year-to-date and is the third worst performer globally after the Turkish lira and the Argentinian peso. At 1200 hrs the rupee was trading at 91.14 against the greenback, down 36 paise from its previous close after opening week at 90.87.
The previous low was 90.78 on Monday, which was a loss of 29 paise over its previous close. At the interbank foreign exchange, the rupee opened week and kept losing ground as the session progressed, traders said.
"The trade deal still seems to be off by a distance with the commerce secretary saying the first phase will be signed before the end of the year and news that we are closest to the deal being signed. The uncertainty has clouded the recovery on the rupee0dollar pair with dollar buying happening every day," Anil Kumar Bhansali, treasury head at Finrex Treasury Advisors said.
What’s more surprising is that none of the positive numbers are helping the rupee find its feet. Even a massive reduction in trade deficit reported Monday could not bring about a recovery in the rupee with foreign institutional investors outflows continuing, he added. Foreigners have pulled out close to $19 billion mostly from equities and a smaller portion from debt.
They sold equities worth Rs 1,468.3 crore Monday, according to exchange data. Also, wholesale price inflation stayed in the negative for the second consecutive month in November at -0.32%, even though there was an uptick in prices of food articles like pulses and vegetables on a month-on-month basis, government data showed Monday. Wholesale price index based inflation was at -1.21% in October and 2.16% in November last year.
Again, the continuing weakness of the dollar also is not helping the unit, as the dollar index, which gauges the greenback's strength against a basket of six major currencies, is down 0.03% at 98.27. the index has lost more than 7% so far this year.