Extending its losses for the fourth day, the rupee on Wednesday tumbled by 31 paise to close at fresh nine-month low of 68.56 against the dollar due to persistent capital outflows amid a resurgent US currency in global markets.
The forex market sentiment turned highly fragile due to consistent unwinding by foreign investors against the backdrop of demonetisation as well as renewed Fed rate hike fears.
Robust month-end dollar demand from oil companies along with aggressive hedging strategy adopted by importers in the wake of currency volatility also weighed on the rupee trade, a forex dealer said. Some caution ahead of the FOMC meeting minutes later in the day also dampened rupee trade, he added. The Indian currency has fallen by 2.91 per cent since Donald Trump’s victory in the US Presidential polls earlier this month.
At the Interbank Foreign Exchange market, the rupee opened substantially weak at 68.36 from Tuesday’s closing value of 68.25 and kept descending throughout the day with high amount of volatility.
It hit intra-day low of 68.58 in late afternoon deals before ending at 68.56 the level not seen since February 26 when it had ended at 68.62 showing a sharp loss of 31 paise, or 0.45 paise.