Mumbai, Aug 29 (IANS) Caution ahead of key macro-economic data, coupled with volatile global crude oil prices and a rise in the demand for US dollars pulled the Indian rupee to a fresh low on Wednesday.
According to analysts, continuous outflow of foreign funds from the country’s equity markets also dragged the rupee lower.
On an intra-day basis, the Indian rupee plunged to 70.65-66 — the lowest ever mark — against the greenback after it opened at the Interbank foreign exchange market at 70.31-32 and soon surpassed its record low of 70.40 to a greenback made on August 16.
It settled at a record closing low of 70.59-60 against the US dollar, weaker by 49 paise from Tuesday’s close of 70.10 to a US dollar.
“Weakness across emerging market currencies like Lira, Real, Ruble, Rand and Yuan, alongwith weakness in Euro has caused Rupee to depreciate. Rising oil prices is an added concern. RBI may have been an active seller on dollars in spot market as well as derivatives market,” said Anindya Banerjee, Deputy Vice President for Currency and Interest Rates with Kotak Securities.
“Over the near term we expect USD/INR to remain within a range of 70-71.20 on spot.”
Apart from global cues, outflow of foreign funds from the Indian equity and bond markets has had an adverse impact on the rupee.
Investment-wise, provisional data with exchanges showed that foreign institutional investors sold scrips worth Rs 1,415.87 crore whereas domestic institutional investors bought stocks worth Rs 1,114.36 crore.
Besides, caution prevailed ahead of the release of India’s GDP and fiscal deficit data. The key macro-economic data points will be released on Friday.
“Factors like month-end US dollar demand from importers, increase in crude oil prices in the international market and caution ahead of key economic data on Friday pressurised the rupee,” Anand Rathi, Shares and Stock Brokers research analyst Rushabh Maru told IANS.
Even the Indian equity market was subdued as the rupee plunged.
Index-wise, the Nifty50 on the National Stock Exchange (NSE) closed at 11,691.90 points, lower 46.60 points or 0.40 per cent from its previous close.
The barometer 30-scrip S&P BSE Sensex closed at 38,722.93 points, lower 173.70 points or 0.45 per cent from the previous close of 38,896.63 points.