Rs does U-turn, nosedives 67 paise against US dollar

Mumbai: After two sessions of massive gains, the Indian rupee Monday again tumbled by 67 paise to close at 73.12 against the US dollar on increased demand for the American currency from importers and unabated foreign fund outflows.

On Friday, the rupee clocked its biggest single-day gain in over five years, surging by 100 paise to close at 72.45 against the US dollar. The domestic currency had gained 150 paise in the previous two sessions. Forex traders said the strengthening of the American currency against major global currencies overseas and weakness in the domestic equity market weighed on the local unit Monday.

After opening lower at 72.76, the rupee plunged to the day's low of 73.13 and finally settled for the day at 73.12, down 67 paise over its previous closing price.

"The rupee continues to remain under pressure, but the pace of depreciation has slowed somewhat as the crude oil prices have softened in the international market," Anand Rathi Shares and Stock Brokers Research Analyst Rushabh Maru said adding that "tension still exists between the RBI and government which is a matter of concern".

Dealers said unabated capital outflows by foreign funds dampened the sentiment, even as easing crude oil prices restricted the rupee fall to some extent. Foreign funds pulled out Rs 196.90 crore from the capital markets on a net basis, while domestic institutional investors bought shares worth Rs 852.99 crore Friday, provisional data showed.

According to a Crisil Research report, the rupee has fallen sharply against the US dollar this fiscal, losing nearly 13.8 per cent during April to October 31, as global headwinds multiplied and the current account

deficit widened.