Rupee hits 27-month low to settle at 67.09 against dollar
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Rupee hits 27-month low to settle at 67.09 against dollar

The rupee again breached the 67-mark by depreciating 18 paise to 67.06 against the dollar in early trade today at the Interbank Foreign Exchange.

business Updated: Dec 14, 2015 20:40 IST
Rupee,Business,US dollar
The rupee weakened further to 67.12 in mid-afternoon trade before ending at 67.09, revealing a fall of 21 paise, or 0.31%.(Reuters File Photo)

Heightened uncertainties over an impending Fed rate hike dragged the Indian rupee to below 67-mark, a 27-month low against the greenback amid strong overseas sentiment.

The domestic unit resumed sharply lower at 67.09 per dollar from weekend’s close of 66.88 at the Interbank Foreign Exchange market on the back of frantic dollar demand and weakened further to 67.12 in mid-afternoon trade before ending at 67.09, revealing a fall of 21 paise, or 0.31%.

It briefly climbed a high of 66.95 during the intra-day trade.

Concerns related to capital outflows in the aftermath of the first interest rate hike in nearly a decade predominantly weighed on the rupee trade.

However, a smart rebound in local equities which largely shrugged off the potentially negative impact of higher rates against the backdrop of encouraging macroeconomic environment capped the rupee’s losses to some extent.

In worldwide trade, the dollar was trading broadly higher against the other major currencies as markets turned their attention to the Federal Reserve’s policy meeting this week amid mounting expectations for a rate hike.

While the dollar buoyancy has pressured global currencies this year, but the rupee is still one of the best-performers among the emerging-market currencies due to India’s feel-good factor story, a forex dealer said.

The home currency has largely held its ground against the dollar, falling just 5.90% since the start of the year.

On the macro-front, country’s industrial growth surpassed expectations during October, surging 9.8% to a five-year high after a robust 7.4% second quarter GDP figure.

While the Wholesale Price Index-based inflation moved up to (-)1.99% in November, easing deflationary trend. The dollar index, which tracks the world’s reserve currency against a basket of its peers, is up 0.16% at 97.77. Meanwhile, brushing aside global volatility, the stock market flagship index Sensex rebounded over 106 points to end at 25,150.35.

Foreign investors have started to pare down their equity positions and pulled out nearly Rs 5,500 crore from stock markets since the beginning of the month on worries of an interest rate hike by the US Federal Reserve.

In forward market on Monday, premium for dollar recovered on fresh payments from banks and corporates.

The benchmark six-month premium payable in May rose to 195.25-196 paise from 193.5-195.5 paise and far forward November 2016 contract also firmed up to 405-406 paise as compared to 401.5-403.5 paise.

The RBI fixed the reference rate for the dollar at 66.9940 and for the euro at 73.4656.

The rupee slumped against the pound sterling to settle at 101.61 from weekend level of 101.28 and dropped against the euro to finish at 73.64 from 73.36.

It also softened against the Japanese currency to close at 55.06 from 55.05 per 100 yen earlier

First Published: Dec 14, 2015 10:19 IST