The rupee shed 87 paise to 64.98 in the late afternoon trade on persistent demand for dollar from banks and importers due to sustained capital outflows by foreign funds.
After opening at 64.85 against the previous close of 64.11, the rupee touched a new low of 65.65 in the early trade. However, it recovered slightly in the afternoon session on mild dollar selling by exporters.
The currency’s slide continued amid steps by the Reserve Bank of India (RBI) to increase the availability of cash in the banking system.
Heavy dollar demand from importers, continued capital outflows and expectations that the US Federal Reserve would start withdrawing its bond-buying programme next month, weighed on the currency.
Persistent capital outflows by foreign funds mainly affected the market sentiment as they sold shares worth Rs 792.11 crore yesterday, as per the provisional data from stock exchanges.
In the New York market, the US dollar rose against most key rivals yesterday as minutes from the Federal Reserve’s July meeting showed almost all officials supported a slowing of asset purchases later this year, depending on the data.
