Rupee hits 20-month low, falls below 64 against dollar

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SME Times News Bureau | 08 May, 2015
Continuing its weakness for the fifth session, the rupee dipped below the 64-mark to end at 20 months' low of 64.23 against dollar on Thursday on sustained capital outflows by foreign funds.

This is due to weakening of the equities in the bourses, capital outflows and higher demand from importers and banks, industry officials said.

The rupee opened at Rs.63.74 after the previous day's close of Rs.63.54 and went down to Rs.63.88 during the intra day trade.

The rupee opened lower at 63.78 as against last closing level of 63.54 at the Interbank Foreign Exchange (Forex) market, later it slid further to breach 64-level to trade at 64.28 at mid-session before concluding at 64.23 per dollar, showing a loss of 69 paise or 1.09 percent.

This is the weakest close of Indian currency since September 6, 2013, when it was closed at 65.24.

The domestic currency has dropped by 108 paise or 1.71 percent in the five sessions. It moved in a range of 63.69 and 64.28 per dollar during the day.

However, Crude oil prices fell by 56 cents to USD 67.21 in early Asian trade after hitting 2015-high in the previous session.

The sensitive index (Sensex) of the Bombay Stock Exchange (BSE) on Thursday closed 118.26 points, or 0.44 percent, down at 26,599.11 points after opening at at 26,721.34 points. It had touched a high of 26,850.37 points and a low of 26,423.99 points during the day.

The wider 50-scrip Nifty of the National Stock Exchange (NSE) also closed in the negative territory - down 39.70 points, or 0.49 percent, at 8,057.30 points.

Data available with the bourses after the closing bell on Thursday showed that the Sensex has now closed at its lowest level since Oct 21, 2014 and the Nifty at its lowest level since Dec 17, 2014. For every stock that gained on Thursday, there were more than two losers.

"Weakening of the rupee along with a rebound in crude oil prices has also dampened the sentiments," said leading brokerage Sharekhan, while adding that dampened sentiments also resulted in the Indian rupee falling to a 20-month low of 64.23 per dollar.

The brokerage attributed the fall in the value of the rupee and the key equity indices to continued selling by foreign funds due to worries over retrospective taxes and delays in the land acquisition bill, which had reduced the allure of local assets for these overseas players.