The rupee on Monday followed the stock market to decline by 37 paise or 0.59% to close at 62.60 against the dollar, on the back of month-end demand for the US currency from importers and concerns over a stimulus rollback by the US Fed.
“The rupee slumped close to quarter a per cent against the greenback on renewed concerns of stimulus tapering from US Fed,” said Jayant Manglik, president (retail distribution), Religare Securities. “It is expected to trade weak and may head towards 63.50-64 this week.”
Market sentiment turned wary after the St Louis Federal Reserve’s president James Bullard said the US central bank could make a small stimulus reduction at its next meeting in October.
A tapering of the monthly $ 85 billion bond purchases could see an outflow of dollars from emerging markets, including India, as a recovering US economy draws investors.