Rupee plunges 63 paise to closes at over four-month low of 61.18 against US dollar

In early trade, the domestic unit had lost 22 paise to open at an over three-month low of 60.77 against the US dollar on increased capital outflows amid demand for the American currency from importers.

(Photo: Reuters) (Photo: Reuters)

The Indian Rupee plunged 63 paise, or 1.04 per cent, logging its worst weekly loss since January 24. It closed at 61.18 versus the US dollar on Friday amid weakness in global stock markets and a strong US currency. worst weekly loss since January 24.

Importers and some banks bought dollars and short-sellers covered their positions on hopes of further hike in the dollar value after US Fed recently trimmed its monthly economic stimulus by US $ 10 billion. The dollar too gained against most peers as the American economy grows stronger.

A steep fall in local indices after a global sell-off also weighed down on the rupee. The benchmark Sensex on Friday slumped over 414 points, or 1.60 per cent, to a 3-week low.

Foreign Institutional Investors had pulled out Rs 1,654.86 crore on Thursday. This also hit the rupee sentiment.

At the Interbank Foreign Exchange (Forex) market, the domestic currency commenced weak at 60.75 a dollar from last close of 60.55 and immediately touched a high of 60.69.

However, it later tumbled to a low of 61.19 before ending at 61.18, showing a fall of 63 paise or 1.04 per cent. This is its weakest closing since 61.34 on March 20. In absolute term, this 63-paise fall is the biggest since January 24 (73 paise).

On Thurday, it has plunged by 49 paise or 0.82 per cent.

The strength in US dollar index and weakness in Asian currencies and global stock markets were seen taking a toll on the currency. The failure to reach an agreement on the WTO deal further hit investor sentiments, a forex broker said.

On the drop in markets, RBI Governor Raghuram Rajan in Delhi said, "We are not immune to what is happening world markets."

For the week, the rupee slumped 108 paise - its worst drop since 112-paise plunge in the week ending January 24.

Pramit Brahmbhatt, CEO, Veracity Group said, "Rupee fell taking cues from dollar which traded strong. A global sell-off hammered the market which further depreciated the rupee...some intervention was suspected from RBI through state-run banks."

The trading range for the spot USD/INR pair is expected to be within 60.70 to 61.70, he added.

In the forward market, premium ended almost stable.

The benchmark six-month premium payable in January ended a tad higher at 249.5-251.5 paise from paise previously.

Far-forward contracts maturing in July, 2015, however, finished at its overnight level of 490-492 paise.

The Reserve Bank of India fixed the reference rate for dollar at 60.8510 and for the euro at 81.4615.

The rupee dropped further against the pound to 102.97 from previous close of 102.15 and also remained weak against the Japanese yen to 59.43 per 100 yen from 58.86.

It tumbled against the euro to 81.93 from 81.02.