Falling for the fourth straight day, the rupee on Monday lost 35 paise to end at nearly two-week low level of 53.85 on sustained dollar selling by exporters amid RBI concerns that the country’s current account deficit is headed to its highest ever this fiscal.
A firm dollar overseas also weighed on the rupee while continued capital inflows failed to restrict the rupee fall, forex dealers said.
The rupee commenced lower at 53.65 a dollar from last Friday’s close of 53.50 at the Interbank Foreign Exchange (Forex) market. It tried to mark a recovery immediately and touched a high of 53.55.
However, the rebound proved to be short-lived as it later dropped to a low of 53.86.
“Last year, CAD was 4.2 per cent of GDP, but this year we expect it would be significantly higher than that. It’s going to be historically the highest CAD measured as a proportion of GDP,” RBI Governor D Subbarao said, though he refrained from giving any figure.
The rupee finally settled at 53.85, a fall of 35 paise or 0.65 per cent.
Pramit Brahmbhatt, CEO, Alpari Financial Services (India) said: “The rupee continued to weaken on the first day of the week on growing concerns of slowdown.”
Current account deficit means the country is importing more goods and services than it is exporting, net income and transfers from abroad.
The dollar index, a gauge of six major global rivals, was up by 0.14 per cent in Europe on Monday.
Meanwhile, the Indian benchmark Sensex today declined by 24.20 points, stretching losses to the eighth straight session.
FIIs picked up shares worth $ 285.17 million last Friday, taking the year’s total so far to over $ 7.5 billion, as per SEBI data.