Mumbai, India (BBN)-The rupee crashed to nearly 39-month low of 68.84, plummeting by another 28 paise against the US dollar in early trade, due to sustained foreign fund outflows and the greenback’s surge in overseas markets.
The domestic currency had hit its all-time intra-day low of 68.85 and closed at 68.80 on August 28, 2013, reports The Hindu Business Line quoting PTI.
Forex dealers said besides a strong month-end demand for the American currency from importers, continued capital outflows from foreign funds and the dollar’s bull run on an imminent hike in Fed’s interest rates mainly weighed on the domestic currency.
Further, a weak domestic equity market also put pressure on the rupee, they said.
The rupee had shed 31 paise to close at a new nine-month low of 68.56 against the dollar yesterday.
The Indian currency had shrunk 2.92 per cent since Donald Trump’s victory in the US Presidential polls earlier this month.
A huge outflow of capital from 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.
Meanwhile, the BSE Sensex fell by 145.97 points or 0.56 per cent to 25,905.84 points in early trade.