Rupee tanks to 3-month low of 60.55 vs $, down 49 p on outflows
The rupee lost 19 paise to 60.25 against the US$ in early trade on the interbank foreign exchange market due to appreciation of the US currency overseas.business Updated: Jul 31, 2014 20:13 IST
The rupee on Thursday depreciated 49 paise to close at a three-month low of 60.55 against the US dollar on capital outflows after the US Fed trimmed its monthly bond buying programme by another USD 10 billion.
Heavy dollar demand from importers and weakness in local equities also pulled the rupee down against the Greenback.
The dollar index was quoting up by 0.10% against a basket of six major global currencies. The American currency gained strength on signs of an improving US economy, besides the USD 10 billion cut in stimulus, forex traders say.
At the Interbank Foreign Exchange (Forex) market, the domestic unit commenced lower at 60.24 a dollar from overnight close of 60.06, which was an over two-week high, but tried to recover as it surged to 60.20.
It, later, again fell back to a low of 60.57 on heavy month-end dollar demand from importers before concluding at 60.55, sharply down 49 paise or 0.82%. This was its lowest value on closing since 60.65 on April 28, 2014.
Pramit Brahmbhatt, CEO, Veracity Group said: "Rupee slipped down to a three-month low, taking cues from strong dollar in global markets. Also, there was dollar demand from oil importers and state-run banks for corporate and defence- related payments. The trading range for the spot USD/INR pair is expected to be within 60.20 to 60.90."
The fiscal deficit in the first quarter of 2014-15 was Rs 2.97 lakh crore or 56.1% of Budget Estimates for the whole financial year, government data showed on Thursday.
Meanwhile, the stock benchmark S&P BSE Sensex tumbled by 192.45 points, or 0.74%. FII/FPIs on Thursday pulled out Rs 1,654.86 crore from stocks as per exchange-level data.
On Wednesday, the US Fed reduced its asset purchase program from USD 35 billion/month to USD 25 billion/month -- the sixth consecutive USD 10 billion cut. The Fed noted that economic activity rebounded in Q2 2014, which was also testified by data. US GDP grew 4.0% QoQ (annualized) in Q2 compared to 2.1% contraction in Q1.