Rupee sinks to new low of 70.52, slumps 42 paise against US dollar

The rupee on Wednesday collapsed to a lifetime low of 70.52 by plunging 42 paise against the dollar on strong month-end demand for the American currency amid foreign fund outflows.

Consistent dollar demand from banks and importers, mainly oil refiners, following higher crude oil prices, kept the rupee under pressure. At the interbank foreign exchange market, the rupee opened lower at 70.32 a dollar against 70.10 previously and dropped further to a new low of 70.52 in late morning deals, down by 42 paise.

Furthermore, dollar's strength against some currencies overseas also put pressure on the rupee, dealers said. Overseas, the US dollar inched higher against basket of currencies in early Asian trade, after dipping to a four-week low overnight. Relief over the US-Mexico trade deal was dimmed by concerns that the China-US trade war will drag on for some time.

A sharp surge in trade deficit too impacted the rupee. Trade deficit soared to a near five-year high of USD 18 billion. On Tuesday, the local currency had bounced back in a tepid fashion from the record closing low, gaining 6 paise to end at 70.10 against the US currency.