Rupee hits new all-time low, slides past 78.29 per US Dollar for first time
Forex dealers said investor morale was pulled down by weak Asian currencies, a lacklustre trend in local stocks, and continued foreign capital outflows. The rupee began at 78.20 versus the US dollar on the interbank foreign exchange, then fell to 78.29, a record low, representing a 36-paise drop from the previous closing.
FollowIn early trade on Monday, the rupee fell 36 paise to an all-time low of 78.29 vs the US dollar, reflecting the strength of the American currency overseas as investors rushed to the safe-haven currency amid an overall risk-averse mindset.
Forex dealers said investor morale was pulled down by weak Asian currencies, a lacklustre trend in local stocks, and continued foreign capital outflows. The rupee began at 78.20 versus the US dollar on the interbank foreign exchange, then fell to 78.29, a record low, representing a 36-paise drop from the previous closing.
The rupee fell 19 paise to a new lifetime low of 77.93 versus the US dollar on Friday. "Weak global sentiments, as well as weak Asian and European currencies, have caused the rupee to start below 78, despite the RBI's insistence that it not surpass 77.70. We'll have to wait and see how the RBI acts in the coming days," Anil Kumar Bhansali, Head of Treasury at Finrex Treasury Advisors, agreed.
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Brent crude futures declined 1.46 percent to USD 120.23 a barrel, the global oil benchmark.
Meanwhile, the dollar index, which measures the strength of the US currency against a basket of six currencies, was 0.30 per cent higher at 104.45. The 30-share Sensex was trading 1,461.54 points, or 2.69 percent, down at 52,841.90, while the wider NSE Nifty was down 418.95 points, or 2.59 per cent, at 15,782.85. According to stock exchange statistics, foreign institutional investors were net sellers in the capital market on Friday, offloading shares worth Rs 3,973.95 crore.
Last week, the basket of crude oil that India purchases reached a decade high of $121 a barrel. On June 9, international oil prices were around a 13-week high. The dropping rupee might also be related to rising global crude oil costs.
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