Rs crashes to more than two-month low on foreign fund outflows

Mumbai: The rupee Monday fell sharply by 59 paise to close at nearly two-and-a-half-month-low of 70.51 against the US currency due to persistent foreign fund outflows and renewed worries over rising crude oil prices.

An unabated sell-off in domestic equity markets also weighed on the domestic currency, forex dealers said.

The rupee opened sharply lower at 70.16 and fell further to touch over two-month low of 70.53 at the interbank foreign exchange market as oil prices rose over 1 per cent in global markets.

The local unit finally settled at 70.51, down by 59 paise over its previous close. The rupee had on Friday closed at 69.92 against the US dollar.

"Indian rupee plunges along with other emerging market currencies amid concerns of a drawn- out trade war.

"Sovereign bonds edged higher due to contraction in factory output and expectations of inflation staying below the target. This could force RBI to look for the Interest rate cut options in upcoming policy meet. Rise of more than 1.5 per cent in crude prices and heavy selling in domestic equity markets also weighed on rupee during today's trade," said VK Sharma, Head PCG & Capital Markets Strategy, HDFC Securities.

Brent crude futures, the global oil benchmark, rose 1.57 per cent to USD 71.73 per barrel due to simmering tensions in the Middle East.

Saudi Arabia said Monday that its two oil tankers were among the commercial vessels that were damaged in "sabotage" attacks in the Gulf. The UAE on Sunday said that four commercial vessels were attacked near bunkering hub Fujairah.