Mumbai: The Indian rupee slumped to another record low on Wednesday, giving up early gains, on dollar demand from oil companies and concerns that the US Federal reserve will indicate an early exit from its economic stimulus programme, dealers said.
The rupee fell to as low as 64.41 per dollar at 2:25 pm, compared with the previous day’s close of 63.23. It beat the previous record low of 64.12 per dollar the currency hit on Tuesday.
Stock markets too were trading down, erasing early gains.
India’s benchmark equity index, Sensex, was at 18,087.56 points, down 0.87% from the previous close and shedding 518 points from the day’s peak.
“There are fears that US Fed will talk about an early exit from the economic stimulus programme. That apart, there was dollar demand in the market from oil companies,” said N.S. Venkatesh, treasurer at IDBI Bank Ltd. “Eventually, the rupee will stabilise at 63.70-63.80 levels as clarity emerges,” Venkatesh said.
Since January this year, the rupee has weakened more than 14% and has lost the most among Asian currencies during that period. The yield on India’s benchmark bond was at 8.43% as compared with its previous close of 8.925%. Bond price and yield move in opposite directions.
