Falling for the eight day in a row, the Indian rupee on Wednesday ended at 52.35/36 -- its all-time closing low -- against the U.S. dollar amid continuing signs of capital outflows and steep fall in stock markets.
Dealers said persistent capital outflows amid late dollar buying by importers kept the rupee under pressure despite suspected Reserve Bank of India (RBI) intervention.
Referring to the decline in the value of rupee, Finance Minister Pranab Mukherjee in New Delhi said, “RBI is closely monitoring the situation and will do the needful as required.”
In a see-saw trade at the Interbank Foreign Exchange (Forex) market, the domestic unit opened weaker. However, dollar selling by non-PSU banks as well as suspected intervention by the central bank helped the rupee to bounced back to the day’s high of 51.70.
The Reserve Bank’s intervention, however, could not be officially ascertained.
The rupee had on Tuesday plunged to its life--time low of 52.73 intra-day.
Meanwhile, the BSE benchmark index Sensex fell to over two-year low of 15,699.97 on Wednesday as investors sold heavily ahead of the settlement in this month’s derivative contracts amid worries of slow growth in global economies.
“As non-PSU banks entered the forex market, Indian rupee traded strong in first half. However, in the second half it traded weak, mainly taking cues from global markets where dollar quoted strong against the major currencies. Local equities closed down by over two per cent which also weakened the rupee,” Alpari Financial Services (Indai) CEO Pramit Brahmbhatt said.
At the fag end, the rupee came under pressure again on dollar demand from importers, mainly oil refiners, to meet their month-end needs and touched a low of 52.60 before concluding weak at 52.35/36, down 6 paise from its last close.
FIIs sold shares worth USD 623.99 million in last six days since November 15.