The Indian rupee. Photo: AFP
The Comptroller General of Accounts' data for April 2020 show that the federal government's share of tax collection during April was 167 billion rupees (US$2.21 billion) compared with 553 billion rupees in the previous year. Photo: AFP

The Indian currency continues to drop as the US dollar gains strength. After closing at a record low of 69.05 on Thursday, the Indian rupee slid further by 7 paise to a fresh low of 69.12 against the greenback in early trade on Friday.

Meanwhile, the US dollar has reached its highest level since July 2017 after Federal Reserve Chairman Jerome Powell expressed confidence in the U.S. economy and said the central bank was on track to keep hiking interest rates gradually, the Financial Express reports.

The weakness in domestic bourses, along with firm oil prices and the persistent outflow of foreign funds have continued to dampen the rupee. In the first four days of this week, foreign investors have off-loaded funds worth 16.16 billion rupees in domestic markets.

On Thursday the rupee plunged 43 paise against US dollar to close at 69.05. This was the biggest single-day fall since May 29. The last time the rupee hit an all-time closing low of 68.94 was on July 5.

The weak rupee is expected to adversely affect importers as they will face the dual impact of high input costs and a weak currency. Passing those costs to customers could also be a challenge.