In early trade today, the rupee crossed past the psychological 70-mark to hit an all-time low of 70.08 a dollar for the first time amid concern over the risk of contagion from Turkey's financial-market turmoil. Investors are turning to dollar as safe haven with Turkeys currency lira crisis continuing since the last week. Investors preferred safe-havens such as the U.S. dollar and the Japanese yen after a plunge in the Turkish lira pulled down all emerging market currencies. The cause of this fall has been attributed to fears over a rise in global protectionist measures, along with a strong United States economy.
The government on Tuesday blamed external factors for the rupee's fall to beyond 70 against the USA dollar, reported PTI.
"There is nothing to worry at this stage".
Forex dealers said selling of the greenback by banks and exporters supported the rupee. Subhash Chandra Garg, secretary at the department of economic affairs, said the rupee was still performing better than some other currencies, and that the country had sufficient foreign exchange reserves.
The weakness of the Turkish lira has strained market currencies in Asia.
In a ray of hope for the domestic economy, latest data showed that retail inflation fell to 9-month low of 4.17 per cent in July on declining vegetable prices which may prompt the Reserve Bank to pause interest rate hike in its next monetary policy review.