Rupee hits record low against dollar amid global strength, equity outflows
index globally driving down Emerging market currency and likely equity outflows.
The local currency ended the day at 83.7175/$1,its weakest closing level and marginally weaker than its close of 83.6875/$1 in the previous session, LSEG data showed.
FPIs sold Rs. 5,130.9 crores from Indian equities on Wednesday, BSE data showed. This comes after the Finance Minister Nirmala Sitharaman announced that long-term capital gains on all financial and non-financial assets will attract a tax rate of 12.5%, up from 10% earlier in the union budget on Tuesday. She also announced short-term gains on certain financial assets shall henceforth attract a tax rate of 20% from 15% earlier.
The dollar index was higher as the Euro slipped lower after weak manufacturing data. The dollar index was at 104.44 levels on Wednesday. The purchasing managers index (PMI) for the eurozone fell 0.8 to 50.1, its second consecutive monthly decline, according to Reuters,
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The rupee has been trading on a weaker note despite inflows in local debt. Foreign portfolio investors have been investing in Indian government bonds through the fully accessible route since the JP Morgan emerging market index inclusion. From June 28th onwards, FPIs have invested $1.82 billion as of 24th July, as per CCIL data.
The Reserve Bank of India
