MUMBAI –The Indian rupee hit a record low of 70 to the dollar on Tuesday as emerging market currencies are sold off by investors spooked by the Turkish financial crisis.
The under-pressure rupee touched 70.09 briefly during mid-morning trade as fears grow that the plight of Turkey’s lira will spread to other emerging countries.
South Africa, Argentina, Mexico, Brazil and Russia have all seen their currencies slip over the past week because, like Turkey, they remain heavily dependent on foreign capital, especially the dollar.
The rupee has been on a downward spiral throughout 2018 after starting the year at 63.67.India is a massive net importer of oil, securing more than two-thirds of its needs from abroad. Analysts say the high crude prices are squeezing the Indian currency, making it less appealing to investors.
The fall in the rupee is leading to a widening of India’s current account deficit, when the value of imports exceeds the value of exports, they say.