Rupee Plummets 77 Paise After Amit Shah Announces Govt's Decision to Repeal Article 370

Mumbai: The rupee was trading down by 77 paise at 70.37 against the American currency on Monday, after the government announced that Jammu & Kashmir would no longer have a special status.

US-China trade related concerns also affected the rupee.

In a highly volatile trade, the rupee opened at 70.20 at the interbank forex market and touched a low of 70.59 and a high of 70.18 against the American currency.

The domestic currency was trading at 70.37 against the American unit, down 77 paise over its previous closing price at 1211 hours.

The rupee had settled at 69.60 against the US dollar on Friday.

Forex traders said, besides the US-China trade related concerns, Home Minister Amit Shah moving resolution in Rajya Sabha that all clauses of Article 370 will not be applicable to Jammu and Kashmir kept pressure on the Indian rupee.

The government on Monday moved a bill proposing bifurcation of the state of Jammu and Kashmir into two union territories — Jammu and Kashmir division and Ladakh.

Making the announcement in Rajya Sabha, Union Home Minister Amit Shah said the UT in Ladakh will have no legislature like Chandigarh while the other UT of Jammu and Kashmir will have a legislature like Delhi and Puducherry.

Shah introduced the Jammu and Kashmir Reorganisation bill.

Market participants were also trading the cautious path as the RBI's Monetary Policy Committee (MPC) meeting starts on Monday. The outcome of the meeting is expected on August 7.

However, easing crude oil prices and weakening of the American currency vis-a-vis other currencies overseas supported the local unit to some extent.

Brent crude futures, the global oil benchmark, fell 1.50 per cent to USD 60.96 per barrel.

Foreign institutional investors (FIIs) remained net sellers in the capital markets, pulling out Rs 2,888.06 crore on Friday, as per provisional data.

Benchmark indices Sensex was trading 462.64 points down at 36,655.58 and Nifty down 143.45 points at 10,853.90.

On the global front, the Chinese yuan fell to its lowest level against the dollar since August 2010 in morning trade on Monday. The weakening was largely owing to US President Donald Trump's plan to impose fresh tariffs on another USD 300 billion in Chinese goods.

The onshore yuan also tumbled, hitting 7.0307 on Monday morning trade to reach its lowest level since 2008.