Rupee, stocks fall after Rajan's decision to not seek second term as RBI governor

Rupee nosedived by 61 paise to 67.69 against the U.S. dollar in the opening trade

June 20, 2016 09:19 am | Updated November 17, 2021 05:04 am IST

A lower opening in the equity market, fresh demand for the American currency from importers also put pressure on the rupee.  Photo: S. R. Raghunathan

A lower opening in the equity market, fresh demand for the American currency from importers also put pressure on the rupee. Photo: S. R. Raghunathan

Rupee slipped to its weakest in nearly a month, while stocks fell and bond yields rose after central bank governor Raghuram Rajan's surprise announcement over the weekend that he would quit after his term ends in September.

Rupee nosedived by 61 paise to 67.69 against the U.S. dollar in the opening trade.

Forex dealers said besides lower opening in the domestic equity market, fresh demand for the American currency from importers also put pressure on the rupee.

On Friday, rupee had recovered 13 paise to 67.08 against the American unit on account of fresh selling by bankers and exporters and recovery in stock markets.

Meanwhile, the Sensex dropped 178.03 points or 0.66 per cent to 26,447.88.

In a surprise move that sent ripples across the financial sector, Mr. Rajan announced on Saturday that he would not continue to head the central bank after his term expires on September 4.

Mr. Rajan announced his decision to RBI employees via an email which was published on the central bank’s website for ‘wider dissemination’. This is the first time during Mr. Rajan’s tenure that his communication to staffers has been made public.

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