The rupee has depreciated 11.7% against the dollar so far this year The rupee weakened by 50 paise against the dollar on Monday, as domestic equity markets plunged amid renewed concerns on the US-China trade front.
A two per cent fall in the domestic equity markets, a day ahead of key state election results, also hurt the currency market.
In a surprise move, Reserve Bank of India Governor Urjit Patel stepped down on Monday, a move expected to spook the Street.
While the rupee ended 0.7 per cent lower at at 71.32 against the greenback on Monday, currency forwards indicated a sharp fall in the coming session.
Here are 10 things to know:The rupee forwards - which track the performance of the currency against the dollar - registered their biggest daily slump in more than five years on Monday.
The one-month contract was last quoted at 72.78 per dollar compared to a spot market rate of 71.35 per cent dollar.
( Sensex, Nifty at 4-week closing low)Mr Patel's resignation on Monday evening came after the majority of markets in the country were closed, but futures contracts, which track the performance of asset classes outside of market hours, suggested significant declines were likely on Tuesday morning.Ahead of the shock move by the central banker, the domestic equity markets had registered their weakest closing levels since November 12, dragged lower by an across-the-board selloff.Analysts will closely watch the outcome of assembly elections in five states - Madhya Pradesh, Rajasthan, Telangana, Chhattisgarh and Mizoram - due on Tuesday.The exit polls on Friday predicted a tight finish between the ruling Bharatiya Janata Party (BJP) and the Congress in Madhya Pradesh and Chhattisgarh, and a win for the opposition party in Rajasthan, news agency Press Trust of India reported."I think typically when central bank governors or leaders anywhere in the world quit, that potentially can have significant effect on the currency and bond markets.
I think it's something that we'll be watchful for tomorrow," said R Sivakumar, head of fixed income, Axis Mutual Fund.
"I think tomorrow and over the next few days we can expect heightened volatility in the markets."Mr Patel's exit from the central bank comes ahead of the next RBI board meeting due on Friday."Definitely a big surprise The timing just before this week's board meeting suggests that there's still a huge gap between government and RBI positions on key issues," said A Prasanna, head of research, ICICI Securities Primary Dealership.Global crude oil prices fell, in line with plunging world stock markets, wiping out the gains made last week when producers' group OPEC (Organization of the Petroleum Exporting Countries) and non-members agreed to slash their crude production from January.
Brent the global benchmark for crude oil - fell around 1 per cent to trade around the $61-a-barrel mark.Monday's closing level of71.32 takes losses in the rupee to 11.7 per cent against the dollar so far this year.(With agency inputs)For the latest News Live Updates on Election Results from each assembly constituency in Madhya Pradesh,Rajasthan,Mizoram,Chhattisgarh,Telangana, like us on Facebook or follow us on Twitter for updates.