Mumbai: The rupee weakened further to hit a fresh low of 72.64 against the USA currency, falling 91 paise in late morning deals on Monday on rising crude oil prices, strengthening dollar and a widened current account deficit.
The ongoing free fall of the rupee against the U.S. dollar is credit negative for Indian companies, especially for those that generate revenue in rupees but rely on dollar debt to fund their operations and have substantial dollar-based expenses, Moody's Investors Service said on Monday.
In fact, during the last five years, the rupee has lost merely 15.52%.
Forex dealers said besides strong demand for the American currency, dollar buying by importers, mainly oil refiners in view of surging crude oil prices and capital outflows, weighed on the domestic currency.
The rupee crashed below the 72-mark to end at a life-low of 72.45 against the United States dollar on growing fears of contagion from an emerging-market rout and escalation of a global trade war.
India's current account deficit in April-June period stood at 2.4 per cent of gross domestic product (GDP), against 1.9 per cent of GDP in the January-March quarter of 2017-18, according to data released by the Reserve Bank of India on Friday.
Oil prices rose as US drilling for new production stalled and as the market eyed tighter conditions once Washington's sanctions against Iran's crude exports kick in from November. Brent crude futures climbed 50 cents, or 0.65 per cent, to $77.33 a barrel.
The report noted that the finance ministry and the Reserve Bank of India are in touch and that there is a constant intervention of the central bank in the currency market as and when the need arises.