sns & pti
MUMBAI, 6 JUNE: The partially convertible rupee crashed to a 12-month low falling below 57 a dollar during early morning deals today on interbank foreign exchange market. Dealers blamed the sharp decline of the rupee on ever improving dollar compared to all global currencies. The rupee, they admit, remains worst hit by the mighty US currency. Dollar selling by exporters and some banks towards the end of trade helped the rupee recover from psychological low levels to close at 56.84, a fresh 11-month level, dealers said.
A weak dollar overseas amid capital inflows also capped the rupee fall to some extent, they said.
“Heavy dollar demand and weakness in domestic equity markets added pressure on the rupee. We continue to hold a bearish outlook on the rupee and see it breaching the all-time low of 57.33 very soon,” said Mr Abhishek Goenka, founder CEO, India Forex Advisors.
The rupee resumed lower at 56.80 a dollar from the previous close of 56.73 and immediately touched a low of 57.00, a level not seen since 28 June 2012 when it had touched an intra-day low of 57.10.
Later, the rupee recovered some ground on dollar selling by exporters to a high of 56.7850 before concluding at 56.84, still showing a fall of 11 paise or 0.19 per cent. Yesterday, it had plunged by 29 paise or 0.51 per cent. The BSE benchmark Sensex today declined by 48.73 points or 0.25 per cent while FIIs infused 88.49 crore yesterday, as per provisional data with stock exchanges.
The dollar index was down by 0.22 per cent against a basket of six major currencies. “The dollar index traded weak which restricted the rupee fall. The RBI may decide against cutting interest rates this month which will help the rupee to find its direction,” Mr Pramit Brahmbhatt of Alpari financial Services (India) said.