Millennium Post

Rupee plunges most in a month, drowns 58p to 61.83 per $

Renewed fears of the US Federal Reserve tapering its stimulus programme earlier than expected and a firm dollar overseas also weighed on the rupee, a forex dealer said. Continued capital inflows stemmed the rupee fall, he added.

The rupee resumed sharply lower at 61.60 a dollar from the previous close of 61.25 at the interbank foreign exchange market. It gradually improved to a high of 61.49 before succumbing to late heavy selling in domestic equities and dollar demand to a low of 61.90.

The rupee closed at 61.83, a fall of 58 paise, the most since since 11 November, when it tumbled by 77 paise.

‘It has been a weak session for the rupee amid negative stock markets and fresh demand for dollars from oil companies,’ said Abhishek Goenka, CEO of India Forex Advisors.

The Index of Industrial Production contracted 1.8 per cent in October, compared with an 8.4 per cent expansion a year earlier, the government said. Retail inflation in November was 11.24 per cent against a revised 10.17 per cent in October.

‘The released data was worse than expected. There are also now increased chances of the RBI raising interest rates by 25 bps or even 50 bps,’ said Admisi Forex India. Foreign institutional investors bought shares worth Rs 962.71 crore on Wednesday, according to provisional data with stock exchanges.

The dollar index was up 0.10 per cent against a basket of six major global currencies ahead of next week's US Fed meet.

‘Rupee closed weak against dollar due to increased demand for the US currency from oil importers as well as the local equities, which ended negative,’ said Pramit Brahmbhatt, CEO of Alpari Financial Services.
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