Tuesday's session marked the rupee sliding to as much as 70.10 against the American currency.
"The Indian rupee just gave the Supreme Leader a vote of no confidence, crashing to a historic low", Rahul Gandhi, president of the main opposition Congress party, said in a tweet referring to his rival Modi.
Asian currencies except Japanese yen trade on a weaker footing. Previously, the rupee had dropped 2.4 per cent or 148 paise in a single day in August 2013. The fall in Turkish Lira has spread the fears that the economic slump in Turkey could spread to other economies.
Recent US-imposed sanctions and tariffs on Turkey have had an impact on its currency. A Reuters poll estimates July inflation of 4.51 per cent compared with a five-month high of 5.0 per cent hit in the previous month. The recent increase in inflation has led the Reserve Bank of India (RBI) to increase the repo rate by 25 basis points twice in two months.
Mumbai: The rupee plunged to yet another record low on Tuesday breaching the psychological 70 level mark against the USA dollar as concern regarding the currency crisis in Turkey spreading to other emerging markets forced investors to shun riskier assets and seek the safety of USA dollar.
Subhash Chandra Garg, secretary at the department of economic affairs, said the rupee was still performing better than some other currencies, and that the country had sufficient foreign exchange reserves. Current Account Deficit is the excess of imports over exports. Investors are turning to dollar as safe haven with Turkeys currency lira crisis continuing since the last week. The Indian rupee breaching 70 mark is not because of India-specific factors, but on account of risks of a global contagion emerging on account of the weakening Turkish Lira against the United States dollar.