The Indian rupee slumped to a new record low of 79.38 against the US dollar on Tuesday amid continued foreign fund outflows and a widening trade deficit.
At the interbank foreign exchange market, the partially convertible rupee started trading at 79.04 against the US dollar and slumped to a low of 79.38 in the intra-day. The rupee closed 41 paise lower at 79.36 against the US dollar.
This is the lowest intra-day as well as the closing level of the rupee. The Indian rupee had closed at 78.95 against the US dollar on Monday.
The rupee fell sharply on Tuesday, a day after the government data showed an increase in the trade deficit.
As per data released by the Ministry of Commerce & Industry on Monday, 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.
According to global financial services group Nomura, the high trade deficit is likely to pull the rupee down to 82 against the US dollar.
Nomura said in a report that India's current account deficit would widen to 3.3 per cent of the gross domestic product (GDP) in the current financial year from 1.2 per cent in 2021-22. (ANI)