The rupee weakened further on Thursday, closing past the 69-mark against the dollar for the first time ever as foreign funds continued to stream out of emerging markets on expectations of higher U.S. interest rates.
The rupee slid 43 paise to close at 69.05 on a day when most Asian currencies weakened against the dollar. The rupee’s biggest single-day fall since May 29, with the currency touching an intraday low of 69.07, was marked by the absence of central bank intervention, dealers said. The RBI sold $12 billion in May in the spot and forward markets to slow the pace of the rupee’s fall. The Indian currency is the worst performer in Asia this year, having lost over 8%.
The previous all-time closing low was on July 5, when it ended at 68.95. The rupee had hit 69.09 intraday on June 28, its lowest ever, before recovering on suspected RBI intervention.
Buoyant greenback
The dollar rose to a one-year high against a basket of currencies as investors raised bets on the currency in the wake of upbeat comments on the U.S. economy by Fed Chairman Jerome Powell.
A no-trust motion moved by opposition parties against the NDA government also weighed on the rupee and stocks.
The 30-share Sensex closed at 36,351.23, down 22.21 points. On the BSE, more than 1,800 stocks ended in the red as against less than 800 gainers. The broader indices like the BSE Midcap and the BSE Smallcap fell more than the benchmarks as investors remained wary about the side counters. Foreign investors have continued their selling spree in July with net sales of ₹616 crore after pulling out almost ₹4,900 crore in the previous month.
