The Indian rupee weakened by 23 paise to hit a fresh historical low of 79.49 against the US dollar on Monday amid weakness in the equity markets. At the interbank foreign exchange market, the partially convertible rupee started trading on Monday at 79.30 against the US dollar against its Friday’s close at 79.26.
The rupee slumped to a low of 79.49 in the intra-day trade. This is the new all-time low of the value of the Indian currency against the US dollar. The rupee’s previous record low was 79.38 against the US dollar recorded last week. The rupee closed the day at 79.48 against the US dollar. In the intra-day, it touched a high of 79.24.
The rupee has weakened amid the selling pressure in the equities markets. Indian stock market key indices, Sensex and Nifty, fell on Monday dragged by heavy selling pressure in IT and telecom stocks. Tata Consultancy Services (TCS) slumped by around 5 per cent on disappointing Q1 results. The scrip was trading 4.39 per cent down at Rs 3121.40.
TCS, the country’s largest IT firm, on Friday reported a net profit of Rs 9,478 crore for the first quarter of the current financial year as compared to Rs 9,008 crore reported in the corresponding period of the last year, posting year-on-year growth of 5.21 per cent. The company’s profit is sharply lower than the market’s expectations. The company’s revenue rose 16.2 per cent year-on-year to Rs 52,758 crore for the quarter ended June 30.
Widening trade deficit has put pressure on the value of the Indian currency. As per data released by the Ministry of Commerce and Industry recently, India’s trade deficit widened to $25.63 billion in June. For the first quarter of the current financial year, the trade deficit has widened to $70.25 billion.
The country’s trade deficit has widened due to high imports. India’s merchandise imports in April-June 2022-23 period stood at $187.02 billion, an increase of 47.31 per cent over $126.96 billion in April-June 2021-22.
In the first quarter of the current financial year, India’s merchandise export rose to $116.77 billion, recording an increase of 22.22 per cent over $95.54 billion recorded in April -June 2021-22. India’s merchandise exports rose by 16.8 per cent to $37.9 billion in June 2022, while imports soared by 51.02 per cent to $63.58 leading to a trade deficit of $25.63 billion during the month.
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