Press Trust of India
Mumbai, August 17: The rupee plummeted by 31 paisa to end at over two-year low of 65.31 against the US dollar Monday on the back of consistent demand for greenback from importers and state-run banks. Sluggish trade data amid highly volatile global currency market sentiment in the aftermath of China’s yuan devaluation predominantly weighed on trade, forex dealers said. Besides, fresh bouts of selling in local equities added pressure on the local currency.
The dollar edged higher against other major currencies amid uncertainty over the impact of the yuan’s devaluation last week as well as global inflation expectations against the backdrop of Fed rate hike. The rupee resumed lower at 65.12 as against last weekend’s level of 65 at the Interbank Foreign Exchange (Forex) market on good dollar demand amid higher greenback overseas as well as weak domestic equity markets. It kept falling during the trade to hit a fresh low of 65.36 before finishing at 65.31, showing a fall of 31 paisa, or 0.48 per cent.
The domestic currency had recovered 10 paisa after sliding for seven straight sessions to close at 65 against the US dollar in Friday’s trade. The country’s exports contracted for the eighth straight month in July to $23.13 billion, pushing the trade deficit to $12.81 billion. The US dollar index, which measures greenback’s strength against a trade-weighted basket of six major currencies, was up 0.14 per cent at 96.74. Meanwhile, the benchmark BSE Sensex fell sharply by 189.04 points to close at 27,878.27. Foreign portfolio investors (FPIs) were net buyers to the tune of Rs 403.76 crore on Friday, as per provisional data released by the stock exchanges. Veracity Group CEO Pramit Brahmbhatt said, “Rupee traded weak taking cues from a stronger dollar. It depreciated by over thirty-one paisa for the day as local equities also traded low and closed on a weak note.”
