Rupee plummets to historic low of 70.09 against US dollar on collapse of Turkish lira

Mumbai: Rerversing all its early gains, the rupee on Tuesday collapsed to a life-time low of 70.09 against the US dollar, falling 16 paise amid fears that Turkish economic crisis could lead to a global financial meltdown. [caption id=“attachment_4619341” align=“alignleft” width=“380”] Representational image. Reuters.[/caption] This is the biggest single day fall for the rupee in the past five years. Previously, the rupee had dropped 2.4 percent or 148 paise in a single day in August 2013. The ongoing currency turmoil in Turkey has dampened investors’ sentiments globally. Around 11 AM the rupee plunged to 70.08 to a US dollar. However, soon afterward the Reserve Bank of India (RBI) is said to have intervened in the open market to curb the rupee’s free fall. The intervention aided the rupee stabilise just a tad below 70 to a dollar at 69.98 around 11.05 AM. The rupee also ended lower against the British pound, euro, and Japanse yen. The rupee was mainly impacted by fall in Turkish lira, said a treasurer of a state-owned bank. Investors are turning to dollar as safe haven with Turkey’s currency lira crisis continuing since the last week. On Monday, the rupee had plunged by Rs 1.08, or 1.57 percent, to a record low of 69.93 against the US currency as the dollar gained rapid strength amid fears that economic crisis in Turkey could spread to other global economies. Panic and capitulation overshadowed trading mood as traders and speculators saw no signs that monetary authorities would step into the foreign exchange market to support the domestic unit. Fears over a rise in global protectionist measures, along with a strong US economy, dragged the Indian rupee to a fresh intra-day low of over 70 against a US dollar during the pre-afternoon hours on Tuesday.