Rupee plunges 62 paise to crack 67 mark against US dollar
The rupee Friday breached the 67 mark to end at over three-month low level of 67.25 against the US currency on fears of capital outflows amid resurgent dollar overseas.
Mumbai: The rupee Friday breached the 67 mark to end at over three-month low level of 67.25 against the US currency on fears of capital outflows amid resurgent dollar overseas.
Scripting its second biggest single-day crash this year, the home currency ended with a steep loss of 62 paise at 67.25 per dollar -- the weakest closing since July 26 when it had closed at 67.27.
A massive selloff in domestic equities which tumbled to multi-month lows on the back of roller-coaster global markets further added to the woes of local unit.
The dollar strengthened against the major world currencies on speculation that the policies of US President-elect Donald Trump would be inflationary leading to rise in interest rates which could hit capital flows to emerging markets like India, a dealer said.
Foreign portfolio investors (FPIs) continued their selling spree and sold shares worth Rs 1,493.27 crore today, provisional bourses data showed.
Meanwhile RBI has been intervening heavily in both spot and forward markets to defend the currency, a forex trader commented.
Extreme caution ahead of the IIP data for September alongwith Wholesale Price Inflation and Consumer Price Inflation data for October on Tuesday also weighed on trade, he added.
The rupee resumed with a gap-down at 67.20 from overnight finish of 66.63 at the Interbank Foreign Exchange (Forex) market following frantic demand for the dollar from importers and corporates even as dramatic pickup in volatility kept local unit under immense pressure throughout the day.
It finally ended at 67.25, showing a steep slide of 62 paise, or 0.92 percent.
The dollar Index was quoted a tad higher 0.02 percent at 98.81 in the afternoon trade.
Meanwhile, RBI today fixed the reference rate for the dollar at 67.0292 and euro at 73.1155.
In cross-currency trades, the rupee took a severe hit against the pound sterling and ended at 84.93 from 82.59 and fell back against the euro to settle at 73.18 as compared to 72.61 on Thursday.
It also retreated against the Japanese yen to finish at 63.29 from 62.47 per 100 yens earlier.
In the forward market, premium for dollar witnessed intense downward pressure due to continued receiving by exporters.
The benchmark six-month premium for April dropped to 150-152 paise from 159.75-160.75 paise and the far-forward October 2017 contract also fell sharply to 318-320 paise from 333.75-334.75 paise yesterday.
In the meantime, crude prices slipped on Friday as the market refocused on persistent fuel supply overhang amid fading production cut hopes.