Zee Media Bureau/Ajeet Kumar
New Delhi: The rupee on Wednesday plunged by 256 paise or 3.7 percent to close at an all-time low of 68.80 against the US dollar on strong demand for the American currency from banks and importers and persistent capital outflows.
In intra-day trade rupee fell as much as 68.85 Vs dollar today.
The rupee had ended down 194 paise at 66.24 against the US dollar after hitting an intra-day low of 66.30 in the previous session.
Forex dealers said besides strong month-end demand for the American currency from importers, concerns related to subsidy burden after the passage of Food Security Bill and capital outflows mainly weighed on the domestic currency.
Further, rising crude prices in the global market also put pressure on the rupee.
They said several measures announced by the government and the RBI failed to check volatility in the rupee.
Weak domestic fundamentals such as record current account deficit concern too put pressure on the rupee, they added.
Foreign investors sold nearly USD 1 billion of Indian shares in the eight sessions through Tuesday - a worrisome prospect given stocks had been the country's one sturdy source of capital inflows, although net purchases so far this year still total USD 12 billion.
In order to arrest the rupee slide, RBI had announced measures such as restriction on Indian firms investing abroad and on outward remittances by resident Indians, triggering talks of return of capital control regime.
Meanwhile, global ratings agency Fitch has said India's fiscal numbers "look weak" and warned of a downgrade if the country is unable to meet the fiscal deficit target.
The rupee is down nearly 19 percent so far this year despite efforts by policymakers to prop it up.
First Published: Wednesday, August 28, 2013, 09:12