Rupee slips 10 paise against US dollar in early trade
Rupee slips 10 paise against US dollar in early trade

Mumbai: The rupee today dropped sharply by 97 paise to more than nine-month low of 72.39 against the US dollar as heavy sell-off in the domestic equity market, weak macro environment and a stronger greenback kept investors edgy.

The Indian currency came under pressure after official data released on Friday showed that India's GDP growth fell to an over six-year low of 5 per cent in the June quarter.

Besides, the growth of eight core industries dropped to 2.1 per cent in July, mainly due to contraction in coal, crude oil and natural gas production.

The rupee opened lower at 72 to the US dollar at the interbank foreign exchange market and lost further ground to touch a low of 72.40 against the dollar.

The domestic currency settled down by 97 paise at 72.39 per dollar, logging its worst single-day fall since August 5 and the lowest closing level since November 13, 2018.

The forex market was closed on Monday on account of Ganesh Chaturthi.

In addition, IHS Markit India Manufacturing Purchasing Managers' Index (PMI) showed that the country's manufacturing sector activity declined to its 15-month low in August.

"GDP data was lower than expected and was down for the fifth consecutive quarter. June quarter GDP grew at the slowest pace since March 2013. Monthly auto sales, eight core infra data and PMI data also came in weak along with the GDP and weighed on the India Rupee," said V K Sharma, Head PCG & Capital Markets Strategy, HDFC Securities.

Forex traders said a stronger dollar also dragged the rupee down. The dollar index, which gauges the greenback's strength against a basket of six currencies, inched up 0.36 per cent to 99.27.

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