Rupee's free fall continues; ends at 30-month low

Sharp fall in domestic stock market affected the rupee sentiment. 

In a highly volatile trade, the rupee on Wednesday plummeted to a 30-month low of 68.67 against the US dollar but made some fag-end recovery to close at 68.47, still down 9 paise, in line with a late rebound in domestic equities.

The domestic unit resumed lower at 68.50 as against Tuesday’s closing of 68.38 per dollar at the Interbank Foreign Exchange market and dropped further to 68.67 before finishing at 68.47, a loss of 9 paise or 0.13 per cent.

It has lost 40 paise or 0.58 per cent in two days. The rupee had hit its all-time closing low of 68.80 per dollar on August 28, 2013 after plunging to 68.85 mark on the same day in the intra-day trade.

Meanwhile, the dollar index was up by 0.02 per cent against a basket of six currencies in the late Asian trade.

Overseas, the US dollar mostly ruled flat against its major rivals in early Asian trade, but the Japanese yen took some ground against the dollar as a recent rebound in crude oil prices fizzled and revived demand for the safe-haven currency.

Pramit Brahmbhatt of Veracity Financial Services said, "On back of weakness in global currencies, we witnessed the rupee opening weaker. And as expected, sell-off in domestic equities forced the rupee to depreciate further till 68.67 level. But a recovery in equity market helped the rupee to recover from early losses. Thus the rupee closed with a minor loss of 9 paisa at 68.47 level."

Trading range for USD/INR spot pair is expected to be in the range of 68-68.75.

Meanwhile, the benchmark BSE Sensex ended higher by 189.90 points or 0.82 per cent today.

Crude prices recovered in Asia today ahead of a meeting between the Iranian and Iraqi oil ministers and following a Saudi Arabia-Russia agreement to freeze output.

Meanwhile, the foreign portfolio investors sold shares worth net Rs 964.19 crore on Tuesday.

In forward market, premium for dollar fell on fresh receivings from exporters.

The benchmark six-month premium July contract fell to 195.5-197 paise from 198-200 paise previously and far forward January 2017 contract also moved down to 415-416.5 paise from 416-418 paise.

The RBI fixed the reference rate for the dollar at 68.5920 and for the euro at 76.6104.

In cross-currency trades, the rupee recovered against the pound sterling to finish at 97.95 from 98.71 previously and moved up against the euro to 76.34 from 76.37.

The domestic unit also recouped against the yen to 60.00 per 100 yen from 60.06 previously.