Rupee free fall continues unabated, inches closer to Rs 70 against dollar

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Rupee’s unabated free-fall continued for the fifth straight day today as it weakened by 17 paise to end the day at 68.73 against dollar, hitting its lowest since August 2013, when the UPA under Dr Manmohan Singh governed the country.

This came after, earlier in the day, the rupee had plummeted to a five year low of 68.84 against the dollar in early trade amid foreign fund outflows and the greenback’s surge in overseas markets.

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Forex dealers said besides a strong month-end demand for the American currency from importers, continued capital outflows by foreign funds and the dollar’s bull run on an imminent hike in Fed’s interest rates, mainly weighed on the domestic currency.

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Further, a lower opening of the domestic equity market also put pressure on the rupee, they said.

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The rupee had shed 31 paise to clsoe at a new nine-month low of 68.56 against the dollar in yesterday’s session.

The Indian currency shrunk 2.92 per cent since Donald Trump’s victory in the US Presidential polls earlier this month.

A huge outflow of capital by foreign investors has been weakening the rupee as they apprehend an impact on the economy in the short-term following the India’s move to demonetise Rs 500 and Rs 1,000 banknotes. Surging US bond yields and a strong dollar overseas are also contributing to the rupee’s fall.

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Meanwhile, the BSE Sensex fell by 145.97 points, or 0.56 per cent, to 25,905.84 points in early trade.

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