The rupee surpassed the crucial level after a series of macro-data indicated weak economic outlook. The Index of Industrial Production (IIP) declined 4.3 per cent in September 2019 compared to a growth of 4.6 per cent in the year-ago period. The contraction was steeper than street estimates and was the sharpest since the new series began in 2011.
Analysts said that the rupee tumbled over expectations that Consumer Price Inflation (CPI) would be higher than the previous month. The CPI data released after market hours showed that retail inflation jumped above RBI's medium term target of 4 per cent to 4.2 per cent in October. The retail inflation was 3.99 per cent in September.
The State Bank of India had said earlier that the second quarter GDP growth may further slip to 4.2 per cent on low automobile sales, deceleration in air traffic movements, flattening of core sector growth and declining investment in construction and infrastructure.
"Based on our composite leading indicator that suggests the GDP growth to slow down further from 5.0 per cent in Q1 of FY20 to 4.2 per cent on account of low automobile sales, deceleration in air traffic movements, flattening of core sector growth and declining investment in construction and infrastructure," the bank had said in a report.
( With inputs from IANS )