The rupee on Thursday plummeted by 45 paise to end at an over 29-month low of 68.30 against dollar on fresh demand for the US currency from banks and importers in view of sharp fall in equities amid foreign capital outflows.
The market benchmark Sensex crashed 807 points to drop below 23,000-mark, its lowest level in 21 months, on concerns over global economy and mounting bad loans as also weak quarterly earnings of state-run banks.
Foreign portfolio investors (FPIs) sold shares worth a net Rs 751.33 crore on Wednesday, as per provisional data released by the stock exchanges. The domestic unit resumed lower at 67.95 per dollar as against Wednesday’s closing level of 67.85 at the Interbank Foreign Exchange (Forex) market and fell further to 68.3450 before finishing at more than 29-month low at 68.30, showing a loss of 45 paise or 0.66%.
The rupee had slumped to its all-time closing low of 68.80 a dollar on August 28, 2013 after touching the record intra-day low of 68.85 the same day. The domestic unit moved in a range of 67.90 and 68.34 per dollar during the day.
The dollar index was down by 0.30% against a basket of six currencies in the late Asian trade. Overseas, the dollar hit a 15-month low against the yen today after comments from Federal Reserve Chair Janet Yellen indicated that next rate hike is still some time away.
Pramit Brahmbhatt of Veracity Financial Services said, “As expected rupee opened on a negative note and since opening trades we saw rupee depreciating. We saw loss in rupee extending as rupee breached lower level of 68. The fall in rupee was mainly on back of global as well as domestic equity market ‘SELL-OFF’. “Our benchmark index NIFTY lost nearly 240 points for the day. Trading range for spot USD/INR pair is expected to be within 67.8 to 68.7 levels.”
Meanwhile, US crude tumbled below 27 dollar a barrel in Asia on Thursday as the over-saturated market struggled to cope with high inventories in the US and an increased output from OPEC.
In forward market, premium for dollar showed a mixed trend due to uneven demand and supply transactions. The benchmark six-month premium payable in July closed lower at 198-200 paise as against 200-202 paise on Wednesday while far-forward January 2017 contract firmed up to 412.5-414.5 paise from 411-413 paise.
The RBI fixed the reference rate for the dollar at 68.0155 and for the euro at 76.8439. In cross-currency trades, the rupee dropped further against the pound sterling to end at 98.59 from 98.46 yesterday and also fell further against the euro to 77.27 from 76.39. The domestic unit moved down against the yen to 61.21 from 59.03 per 100 yen.