The rupee continued to rule weak today and closed 8 paise lower at 63.90 against the US dollar due to steady demand for the greenback from importers amidst sliding equities.
Extremely cautious comments from the Reserve Bank Governor Raghuram Rajan over the economic recovery and follow-up rate cuts alongside capital outflows by foreign funds too weighed on sentiments, forex dealers said.The RBI had yesterday cut interest rates by 0.25 basis points for the third time this year.
The local currency even breached the psychological 64-mark briefly during intra-day trade before witnessing some recovery.The rupee opened modestly higher at 63.77 per dollar at the Interbank Foreign Exchange as compared to overnight closing level of 63.82 and strengthened further to top a high of 63.75.
However, sustained dollar demand from importers and banks kept pressure on the rupee to slip below the 64-mark briefly before rebounding to close at 63.90, showing a loss of 0.08 paise, or 0.13%.
Meanwhile, the benchmark BSE Sensex plummeted further by a hefty 351.18 points to 26,837.20 as intense selling remained unabated after the RBI took a cautious stance on the economic recovery.
Globally, the dollar remained broadly higher against other major currencies with the US dollar index trading up by 0.25% at 96.24.