Rupee hits 2-year low to end at 66.88 against dollar
The rupee fell back sharply after a strong overnight rally and ended with a 17 paise loss at 66.88 against the US dollar on Friday.business Updated: Dec 11, 2015 19:06 IST
The rupee fell back sharply after a strong overnight rally and ended with a 17 paise loss at 66.88 against the US dollar, the lowest level in more than two years in the face of strong demand for greenback.
Fresh dollar demand from importers drive by heavy capital outflows and a steep fall in local equities largely weighed on the rupee value.
Some caution ahead of the key economic data - industrial production numbers for October - which is due later in the day also impacted the trade.
Market sentiments remained jittery with an imminent higher interest rate environment arising out of the US Federal Reserve’s action next week.
Weak dollar overseas, however, limited the fall.
The home currency opened lower at 66.80 per dollar compared to Thursday’s close of 66.71 at the Interbank Foreign Exchange market on fresh dollar demand from banks and importers.
Later, it recovered some lost ground and moved erratically in a range of 66.74 and 66.90 in afternoon trade before concluding at 66.88, revealing a fall of 17 paise, or 0.25%.
The Indian rupee had appreciated by 12 paise to end at 66.71.
Market participants are highly cautious at this juncture ahead of the much awaited Fed rate hike decision next week and the potential impact on the country’s currency as India will not be immune if global volatility increases, a forex dealer said.
In worldwide trade, the dollar traded little changed against other major currencies ahead of US retail data despite robust US jobs data overnight.
China’s yuan dropped to its lowest level against the dollar in over four years impacted by economic slowdown and hefty capital outflows even as the central bank steadily guides the currency lower.
Meanwhile, the Bank of England (BoE) decided to keep the benchmark rate unchanged at 0.50% as expected in the wake of slight deterioration in the outlook for the global economy and inflationary pressure.
The dollar index, which tracks the world’s reserve currency against a basket of its peers, is down 0.14% at 97.78.
Crude oil extended weakness for the fifth consecutive day with the Brent contract closing below the USD 40/bbl for the first time since August 2004.
The stock market flagship index Sensex plummeted over 208 points to end at 25,044.43 after overnight relief rally faltered on renewed worries about global growth woes amid falling oil prices.
Foreign investors sold stocks worth Rs 580.28 crore on Thursday, as per provisional data.
In forward market on Friday, premium for dollar witnessed sustained pressure due to consistent receivings from exporters.
The benchmark six-month premium payable in May softened to 193.5-195.5 paise from 194-196 paise and far forward November 2016 contract also eased to 401.5-403.5 paise compared to 402-404 paise.
The RBI fixed the reference rate for the dollar at 66.7860 and for the euro at 73.1040.
The rupee declined further against the pound sterling to settle at 101.28 from previous level of 101.26 and slumped against the euro to end at 73.36 compared to 73.09.
It, also fell against the Japanese currency to close at 55.05 from 54.98 per 100 yen earlier
First Published: Dec 11, 2015 09:56 IST