Rupee does U-turn, nosedives 67 paise against US dollar
After opening lower at 72.76, the rupee plunged to the day’s low of 73.13 and finally settled for the day at 73.12, down 67 paise over its previous closing price.Updated: Nov 05, 2018 20:11 IST
After two sessions of massive gains, the Indian rupee on Monday again tumbled by 67 paise to close at 73.12 against the US dollar on increased demand for the American currency from importers and unabated foreign fund outflows.
On Friday, the rupee clocked its biggest single-day gain in over five years, surging by 100 paise to close at 72.45 against the US dollar. The domestic currency had gained 150 paise in the previous two sessions.
Forex traders said the strengthening of the American currency against major global currencies overseas and weakness in the domestic equity market weighed on the local unit Monday.
After opening lower at 72.76, the rupee plunged to the day’s low of 73.13 and finally settled for the day at 73.12, down 67 paise over its previous closing price.
“The rupee continues to remain under pressure, but the pace of depreciation has slowed somewhat as the crude oil prices have softened in the international market,” Anand Rathi Shares and Stock Brokers Research Analyst Rushabh Maru said adding that “tension still exists between the RBI and government which is a matter of concern”.
Dealers said unabated capital outflows by foreign funds dampened the sentiment, even as easing crude oil prices restricted the rupee fall to some extent.
Foreign funds pulled out Rs.196.90 crore from the capital markets on a net basis, while domestic institutional investors bought shares worth Rs. 852.99 crore Friday, provisional data showed.
Globally, Brent crude, the international benchmark, was trading 0.30 per cent lower at USD 72.61 per barrel.
According to a Crisil Research report, the rupee has fallen sharply against the US dollar this fiscal, losing nearly 13.8 per cent during April to October 31, as global headwinds multiplied and the current account deficit widened.
“Risks are tilted on the downside because rising interest rates in the US could continue capital outflows from India, putting pressure on the rupee,” the report noted.
Meanwhile, the benchmark BSE Sensex dropped 61 points and settled below the 35,000 mark Monday, tracking weak Asian stocks amid uncertainty around the China-US trade war. The broader NSE Nifty settled 29 points, or 0.27 per cent, down at 10,524.
The Financial Benchmark India Private Ltd (FBIL) set the reference rate for the rupee/dollar at 73.0740 and for rupee/euro at 83.2566. The reference rate for rupee/British pound was fixed at 94.9845 and for rupee/100 Japanese yen at 64.50.
First Published: Nov 05, 2018 20:11 IST