Rupees falls to 64/dollar

The rupee hit a new all-time low on Tuesday on continuing fears that recent measures to stabilise the currency and kickstart the country's flagging economy will not work.


Asia's worst-performing currency this year slid to 64.05 rupees against the dollar, past its previous low of 63.22 struck the previous day.


The rupee has fallen 16% against the dollar this year.


Dealers said they feared the unit could weaken further and central bank measures undertaken over the past three months would not halt the slide.

Emerging market currencies have also been hit by expectations the US Federal Reserve will roll back its stimulus, which has fuelled a flood of foreign investment in developing economies looking for better returns than in the West.

At the Interbank Foreign Exchange (Forex) market, the local currency opened sharply lower at 63.75 a dollar from its previous close of 63.13 and breached 64 mark to trade at fresh low of 64.11, down by 98 paise, or over 1.5%.


Forex dealers said besides strong demand for the American currency from importers and banks, dollar's strength against other currencies overseas amid expectation that the Federal Reserve will soon taper its bond-buying programme weighed on the domestic currency.


Weak domestic fundamentals such as record current account deficit concern too put pressure on the rupee, they said.


The rupee had recorded the decade's worst single-day fall of 148 paise to close at record low of 63.13 against the dollar in the previous session.


In order to arrest the rupee slide, RBI last week had announced measures such as restriction on Indian firms investing abroad and on outward remittances by resident Indians, triggering talks of return of capital control regime.


Sensex slips below 18K level

Meanwhile, the BSE Sensex dipped below 18,000 level falling 336.54 points, or 1.79%, to 17,970.98 points in morning trade on sustained selling, extending losses for the third straight day, as rupee plunged to fresh lows amid a weakening trend overseas.

All sectoral indices led by financials and realty trading in negative territory with fall up to 3.08%. Sensex had lost over 1,060 points in the previous two sessions.


Similarly, the wide-based National Stock Exchange index Nifty slipped below 5,400 points mark by falling 91.75 points, or 1.69%, to 5,323.


Brokers said sentiments remained extremely bearish on heavy selling on free-fall in the rupee's value that hit another record low of 64.05 against the dollar, and a weakening trend in the global market as investors bet that the US Fed will soon announce a wind-down of its massive bond-buying programme.


In the Asian region, Hong Kong's Hang Seng index was down 0.30%, while Japan's Nikkei Index shed 0.53 per cent in the morning trade today.

The US Dow Jones Industrial Average ended 0.47% lower in Monday's trade.



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