Rupee's free fall continues, plunges 26 paise to 67.75

The rupee continued its incessant free fall for the ninth straight day today by dropping 26 paise to end at a fresh 2-1/2 month low of 67.75 on sustained demand for the American currency.

Consistent unwinding by foreign investors on worries regarding the controversial tax issues as well as renewed possibility of the Federal Reserve raising US interest rates predominantly kept home currency under intense pressure.

Month-end dollar demand from oil companies along with aggressive hedging strategy adopted by importers in the wake of currency volatility also weighed on the rupee trade.

At the Interbank Foreign Exchange market, the domestic unit commenced sharply lower at 67.63 a dollar from Monday's closing value of 67.49 following robust dollar demand from banks, hit by sustained fund outflows also impacted by weak opening of local equities.

But, it recovered immediately to trade briefly at a fresh intra-day high of 67.5975.

However, the rupee suffered a late-morning blow and witnessed a sharp downturn to hit a low of 67.77 before concluding at 67.75, revealing a fall of 26 paise, or 0.39 per cent -- extending its longest losing streak since 2007.

Meanwhile, the RBI fixed the reference rate for the dollar at 67.7060 and euro at 75.9323.

In cross-currency trades, the rupee retreated sharply against the pound sterling to finish at 98.98 from 97.71 on Monday.

The local unit continued to slide against the euro and settle at 75.73 compared to 75.66 and dropped further against the yen to close at 61.80 per 100 yens against 61.69 earlier.

Illustration: Uttam Ghosh/Rediff.com