Rupee slips 30 paise to 64.21 against USD amid trade deficit concerns

The rupee plummeted 30 paise to end at a fresh one-week low of 64.21 against the US dollar today, hit by a double whammy of rising global crude prices and worsening trade deficit.

This is its biggest fall since February 1, when it had lost 44 paise.

Overall, sentiment was weak after the country's trade deficit widened to an over three-year high on higher oil and gold imports.

The trade gap soared to USD 16.3 billion in January on account of a 26.1 per cent increase in imports to USD 40.68 billion due to increased inbound shipments of crude oil, as per data released by the commerce ministry.

Meanwhile, India's exports grew by 9 per cent to USD 24.38 billion in January, helped by a healthy growth in shipments of chemicals, engineering goods and petroleum products.

The rupee opened with a sharp gap-down at 63.85 against yesterday's close of 63.91 at the Interbank Foreign Exchange (forex) market and remained under immense pressure throughout the session, despite weak dollar overseas.

It finally finished at 64.21, a steep loss of 30 paise, or 0.47 per cent.

On the international commodity front, global crude prices consolidated recent gains at around USD 64 a barrel.

Brent crude futures were trading higher at USD 64.56 a barrel in Asian trading.

The BSE benchmark Sensex dropped 286.71 points, or 0.84 per cent to end at 34,010.76, while Nifty shed 93.20 points, or 0.88 per cent to 10,452.30.

In other cross-currency trades, the rupee took a further knock against the pound sterling and finished at 90.34 per pound from 89.79. It also dropped sharply against the Japanese yen to close at 60.50 per 100 yens from 59.95 yesterday.

The home unit also drifted lower against the euro to end at 80.18 as compared to 79.73.

The benchmark six-month premium payable in July dipped to 128-130 paise from 129-131 paise while the far forward January 2019 contract also edged down to 263.50-265.50 paise from 265-267 paise previously.