Demonetisation Impact: Rupee plunges to new record low of 68.86 vs USD

Rupee's unabated free-fall continued for the fifth straight day Thursday as it weakened by another 30 paise to hit over 3-year low of 68.86 against the dollar in afternoon trade amid foreign fund outflows and the greenback's surge in overseas markets.

Zee Media Bureau

New Delhi: Rupee's unabated free-fall continued for the fifth straight day Thursday as it weakened by another 30 paise to hit new record low of 68.86 against the dollar in afternoon trade amid foreign fund outflows and the greenback's surge in overseas markets.

The rupee had hit its prior all-time intra-day low of 68.85 and closed at 68.80 on August 28, 2013.

Forex dealers said besides a strong month-end demand for the American currency from importers, continued capital outflows by foreign funds and the dollar's bull run on an imminent hike in Fed's interest rates, mainly weighed on the domestic currency.

The dollar index, which measures the greenback against a basket of currencies, was today near its highest in 14 years, a level that it touched overnight.

Further, a lower opening of the domestic equity market also put pressure on the rupee, they said.

The rupee had shed 31 paise to clsoe at a new nine-month low of 68.56 against the dollar in yesterday's session.

The Indian currency shrunk 2.92 percent since Donald Trump's victory in the US Presidential polls earlier this month.

A huge outflow of capital by foreign investors has been weakening the rupee as they apprehend an impact on the economy in the short-term following the India's move to demonetise Rs 500 and Rs 1,000 banknotes. Surging US bond yields and a strong dollar overseas are also contributing to the rupee's fall.

Meanwhile, the BSE Sensex fell by 145.97 points, or 0.56 percent, to 25,905.84 points.

With Agency Inputs