Rupee plunges to new closing low of 72.97 against dollar

Mumbai, Sep 18: The rupee on Tuesday closed at a fresh lifetime low of 72.97 against the US dollar, down 46 paise against the previous close of 72.51 against dollar.

In the early trade, the domestic currency recovered 10 paise to 72.41 against the US dollar amid volatility on fresh selling of the US currency by exporters and banks. But in late afternoon deals, the rupee gave up the initial gains to hit a new low.

The currency had closed at 72.51 on Monday.

The government's measures announced last Friday to support the currency failed to convince the market participants who continue to remain bearish. The RBI's (Reserve Bank of India) intervention did not help either. Investors now await an interest rate hike in the upcoming monetary policy meet to help the rupee.

Meanwhile, the International Monetary Fund (IMF) said that the Indian rupee has 'effectively' depreciated only 6-7 per cent this year after adjusting it to inflation, almost half of the actual drop in the value of the currency this year.

The IMF, however, warned that the rupee depreciation would jack up the prices of imported goods such as oil and petroleum products, potentially putting an upward pressure on inflation.