Continuing its free fall, the rupee on Wednesday closed at an all-time low of 53.84 losing a hefty 72 paise, or 1.36 per cent, against dollar (its biggest percentage fall in nearly five months) due to sustained demand for the US currency which rose sharply against major rivals and fears over capital outflows. The previous lowest closing was at 53.71 on December 14, 2011.
The rupee opened lower at 53.54 per dollar and fell further to intra-day low of 53.85 per dollar, sparking a new round of suspected intervention from the RBI. Foreign investors have sold a net of nearly Rs 1,400 crore of domestic equities in the last three sessions, as political uncertainty in Greece combines with continued worries about taxation for investments from overseas.
Forex dealers said signs of strong capital outflows weighed against the rupee sentiment. They further said that rupee is expected to breach the 54 level by the weekend, given the current global situation. The RBI is believed to have intervened when the rupee fell to 53.80 level but could not stem the fall. “The central bank is believed to have been active selling dollars in the past few sessions whenever the rupee approaches the 54 level,” said a banker.
Listing reasons for the fall, a dealer said the dollar strengthened against other currencies, especially euro, and a weak stock market contributed towards the rupee fall. The euro fell to over three-month low against dollar on fears that Greece could leave the eurozone. With Greece’s Sunday general election results throwing up no clear winner, the dollar gained amid Alexis Tsipras, leader of Radical Left Coalition claiming the verdict renders the Greek bailout deal null.
