The Indian rupee on Monday plunged 48 paise, logging its biggest fall in more than five weeks, to close at over one-month low of 61.13 against the greenback following fresh dollar demand from importers and negative cues from local equities.
A strong surge in the dollar overseas also kept the rupee under pressure combined with expectations of higher trade deficit data, a forex dealer said. After currency markets closed, government data showed that the trade gap in August rose to $10.83 billion.
Against a gauge of six major global rivals, the dollar index was up by 0.23 per cent ahead of the two-day policy setting meeting of the US Federal Reserve starting tomorrow.
Forex dealers expect early hike in interest rates by the Fed after improving economic indicators, which might induce foreign funds to withdraw money from emerging markets, including India.
At the Interbank Foreign Exchange (Forex) market, the local currency resumed lower at 60.92 a dollar from last weekend’s close of 60.65 and immediately touched a high of 60.90.
Later, rupee met with strong resistance and dipped to a low of 61.18 before settling at 61.13, a steep fall of 48 paise or 0.79 per cent. Previously, it had tumbled by 65 paise on August 6, 2014. The closing level of 61.13 is its weakest since ending at 61.21 on August 13, 2014.
The benchmark S&P BSE Sensex on Monday plunged 244.48 points, or 0.90 per cent, on weak global cues. FPIs/FIIs had picked up shares worth $40.83 million last Friday, Sebi data says.
Meanwhile, the inflation measured on Wholesale Price Index (WPI) dipped to 3.74 per cent in August to a nearly five-year low from 5.19 per cent in July and 6.99 per cent in August 2013.
Pramit Brahmbhatt, Veracity Group CEO said: “Rupee lost over 0.75 per cent taking cues from the strong dollar. The local equities closed in the red even though WPI numbers were at a five-year low in August. However, increased demand for the US currency from importers dented the rupee. The trading range for the spot rupee is expected to be within 60.80 to 61.60.”
The Reserve Bank of India fixed the reference rate for dollar at 60.9945 and for the euro at 79.0306.
The rupee fell back sharply against the pound to 99.29 from 98.34 previously and also dropped to 79.00 per euro from 78.44. It dipped to 57.00 per 100 Japanese yen from 56.60.