The Indian rupee suffered a big blow — breaching the key psychological 68-mark to end near 9-month low as sentiment turned bearish on combination of growing US rate hike expectations and stunning dollar run. Witnessing a near-term rout, the home currency crumbled by a whopping 31 paise to end at 68.13 against the US dollar - its lowest closing since February 29.
Rupee floats near 9-month low on $ shock, ends at 68.13/$
Forex market sentiment tunred into jittery with an imminent higher interest rate environment arising out of the US Federal Reserve’s hawkish tone alongwith heavy capital outflows.
The US Dollar powered ahead to the highest level in 14-years against all major counterparts after Fed Chair Janet Yellen reiterated that US interest rates could rise relatively soon due to an improving domestic labour market and stronger growth. Foreign portfolio investors remained net sellers and sold shares worth a net Rs 983.93 crs.
The domestic currency opened substantially lower at 68 from overnight closing level of 67.82 at the Interbank Foreign Exchange due to strong dollar demand in the wake of sustained foreign capital outflows. It remained under immense pressure throughout the day and encountered extreme volatile momentum, plunging to fresh intra-day low of 68.19 in late aftenoon deals before ending at 68.13.