MumbaiThe rupee continued to bear the brunt of panic dollar demand and plunged by a whopping 27 paise to end at 65.72 a dollar, its lowest level in six-and- a-half months, amid concerns over foreign capital outflows.
This is the lowest level for the home currency since March 14, when it had closed at 65.82 against the greenback. The rupee has depreciated by sharp 3.04 per cent or 194 paise in last 14 trading sessions after revisiting a fresh one-month high of 63.78 on September 8.
A massive fall in local equities amid heightened global volatility took its toll on the currency market sentiment as global funds dumped Indian assets amid rising expectations for an imminent US interest rate hike.
US Fed chief Janet Yellen, in a speech, said the Federal Reserve should stick to gradual rate hikes despite the uncertainty about the inflation trajectory. Staging a smart recovery, the rupee today opened higher at 65.35 compared to Tuesday’s closing level of 65.45 at the Interbank Foreign Exchange market on mild dollar selling by exporters.
However, it quickly reversed the trend in line with local stocks and retreated sharply to hit a fresh intra-day low of 65.7550 in late afternoon deals before ending at 65.72, showing a steep loss of 27 paise, or 0.41 per cent.
The RBI, meanwhile, fixed the reference rate for the dollar at 65.6947 and for the euro at 77.3686. The rupee crash is seemingly inspired by reasons such as fears of massive capital outflows due to tepid macro-economic indicators and also concerns over weak corporate earnings.
A strong month-end dollar demand and a sudden spike in crude oil prices globally too weighed on the domestic currency, forex dealers said. Meanwhile, FPIs withdrew over Rs 1,915.54 crore on net basis from stock markets yesterday, as per provisional exchange data.
The US dollar traded broadly higher, gaining ground on all of its top counterparts on firming interest rate hike bets in the wake of hawkish remarks from the Fed chair also boosted ahead of a highly-anticipated US tax plan, set to be unveiled on Wednesday.
The dollar index, which measures the greenback’s value against a basket of six major currencies, was sharply up at 93.35 — the highest level in one-month. In cross-currency trades, the rupee dropped further against the pound sterling to end at 88.18 from 87.91 per pound but recovered against the Japanese yen settle at 58.20 per 100 yens from 58.48 yesterday.
It also advanced against the euro to close at 77.17 from 77.20 earlier. Despite a spectacular early start, domestic markets endured a volatile session and turned jittery to end at fresh multi-month lows sparked by intense selling across the board as investors turned cautious ahead of the F&O expiry tomorrow amid subdued global sentiment.
Marking its longest losing streak of the calendar year — the flagship Sensex tanked 440 points to close at 31,159.81, while Nifty tumbled over 135 points to 9,735.75. In forward market today, premium for dollar edged up owing to sustained paying pressure from corporates.
The benchmark six-month premium payable in February gained to 115.50-117.50 paise from 114.50-116.50 paise and the far forward August 2018 contract also moved higher to 257-259 paise from 255.50-257.50 paise.
On the international energy front, crude prices eased marginally on Wednesday following a report of a possible increase in Nigerian exports, though an unexpected drop in US crude inventories helped keep the price within sight of this week’s 26-month highs.
Brent November crude futures were down 14 cents at USD 58.30 a barrel in early Asian trade, while U.S. crude for November delivery edged up 11 cents to USD 51.99.
Follow this link to join our WhatsApp group: Join Now
Be Part of Quality Journalism |
Quality journalism takes a lot of time, money and hard work to produce and despite all the hardships we still do it. Our reporters and editors are working overtime in Kashmir and beyond to cover what you care about, break big stories, and expose injustices that can change lives. Today more people are reading Kashmir Observer than ever, but only a handful are paying while advertising revenues are falling fast. |
| ACT NOW |
| MONTHLY | Rs 100 |  |
| YEARLY | Rs 1000 | |
| LIFETIME | Rs 10000 | |
