Rupee breaches new low of 103-level against Pound
New Delhi: The rupee slipped below the 103-level to touch a new bottom of Rs 103.29 against the British pound Tuesday amid sharp plunge in equities and fresh investor concerns over foreign capital outflows.
It finally ended the day at Rs 102.8 against the UK currency, a fall of Rs 2.68 from yesterday's close of Rs 100.12 per pound.
The rupee opened weak this morning at around 100 level against the pound and lost further ground to touch a historic low of Rs 103.29 during the intra-day trade in the Interbank Foreign Exchange (Forex) market.
The rupee also breached the 66 level against the US dollar to close at a new low Rs 66.24, as the stock market snapped its three day upward momentum amid concerns over foreign capital outflows. The huge decline in equity markets weighed down on the Indian currency.
The rupee had first breached the 100 level against pound on August 20 and continued to trade below this level for three consecutive days before regaining some lost ground in the past two sessions (August 23 and August 26).
The rupee has depreciated by about 25 percent in past three months, from close to 83 in mid-May. It was even higher at about 80 against the Pound in March.
Meanwhile, the benchmark S&P BSE 30-stock index, Sensex, plunged 590 points or 3.18 percent today to settle at 17,968.08.
Forex dealers said that besides a strong demand for the American currency from importers and banks, the dollar gained against other currencies as well in the overseas markets amid expectation that the Federal Reserve will soon taper its bond-buying programme.
They also felt that the passage of the Food Security Bill in the Lok Sabha raised fears that the government might face higher subsidy burden, leading to the widening of the current account deficit, affecting the sentiment negatively.
Continuing plunge in equity markets in view of sustained capital outflows by foreign funds is further adding to the pressure on the rupee.
Steps taken by the Reserve Bank and the government to curb volatility in the exchange rate have had little effect so far.