Rupee tanks 48 paise to 1-month low of 61.13 vs dollar

Rupee tanks 48 paise to 1-month low of 61.13 vs dollar

The Indian rupee today plunged 48 paise, logging its biggest fall in more than five weeks, to close at over one-month low of 61.13 against the greenback following fresh dollar demand from importers and negative cues from local equities.

A strong surge in dollar overseas also kept the rupee under pressure combined with expectations of higher trade deficit data, a forex dealer said. After currency markets closed, government data showed that trade gap in August rose to USD 10.83 billion.
Against a gauge of six major global rivals, the dollar index was up by 0.23 per cent ahead of the two-day policy setting meeting of the US Federal Reserve starting tomorrow.

Forex dealers expect early hike in interest rates by Fed after improving economy, which might induce foreign funds to withdraw money from emerging markets, including India.

At the Interbank Foreign Exchange (Forex) market, the local unit resumed lower at 60.92 a dollar from last weekend's close or 60.65 and immediately touched a high of 60.90.

Later, rupee met with strong resistance and dipped to a low of 61.18 before settling at 61.13, a steep fall of 48 paise or 0.79 per cent. Previously, it had tumbled by 65 paise on August 6, 2014. The closing level of 61.13 is its weakest since ending at 61.21 on August 13, 2014.

The benchmark S&P BSE Sensex today plunged 244.48 points, or 0.90 per cent, on weak global cues. FPIs/FIIs had picked up shares worth USD 40.83 million last Friday, Sebi data says.

Meanwhile, the inflation measured on Wholesale Price Index (WPI) dipped to 3.74 per cent in August to a nearly five-year low from 5.19 per cent in July and 6.99 per cent in August 2013.

Pramit Brahmbhatt, Veracity Group CEO said: "Rupee lost over 0.75 per cent taking cues from the strong dollar. The local equities closed in red even though WPI numbers were at a five-year low in August. However, increased demand for the US currency from importers dented the rupee. The trading range for the spot rupee is expected to be within 60.80 to 61.60."

In forwards market today, premium ended narrowly mixed.

The benchmark six-month premium payable in February softened to 231-233 paise from last weekend's close of 232.5-234 paise while far-forward contracts maturing in August, 2015 edged up to 484-485 paise from 483-485.5 paise.
The Reserve Bank of India fixed the reference rate for dollar at 60.9945 and for the euro at 79.0306.

The rupee fell back sharply against the pound to 99.29 from 98.34 previously and also dropped to 79.00 per euro from 78.44. It dipped to 57.00 per 100 Japanese yen from 56.60.

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