Mumbai: Indian rupee on Thursday plummeted to 61.93 and closed 42 paise down at over seven-month low of 61.83 against the greenback on heavy capital outflows and a spike in demand for US dollars. The dollar index was up by a whopping 0.45 per cent against basket of six major global rivals, which also pushed the rupee to log its biggest daily loss since September 15.
A widening trade deficit that hit a 18-month high in September was also among the factors that led to rupee depreciation. At the Interbank Foreign Exchange (Forex) market, the local unit commenced lower at 61.56 and attempted a recovery to touch a high of 61.43.
However, it fell back to a low of 61.93 and closed at 61.83, logging a loss of 42 paise or 0.68 per cent. Today's close is the rupee's weakest level since 61.85 on March 4, 2014. "Demand for dollars from importers weakened rupee. Speculation amongst traders that a big defence payment is due in November that could reduce reserves also weakened the currency," said Suresh Nair, Director, Admisi Forex India Pvt Ltd.
The Indian benchmark S&P BSE Sensex on Thursday closed sharply down by 349.99 points, or 1.33 per cent to end below 26K-mark for the first time after two months. Overseas investors, according to provisional data, sold equities worth over Rs 1,100 crore after about Rs 700-crore sell-off on Tuesday.
Pramit Brahmbhatt, Veracity Group CEO, said: "Rupee traded weak today taking cues from weak local equities and strong dollar." "Also, concerns rose after India's trade deficit widened in September, which will add more worries to the CAD issue. The trading range for the spot rupee is expected to be within 61.40 to 62.40," Brahmbhatt added.
In forwards market, premium fell back on fresh receipts from exporters. The benchmark six-month premium payable in March declined to 209-211 paise from last close of 215.5-217.5 paise.
Far-forward contracts maturing in September, 2015 dipped to 427-429 paise from 442-444 paise. The Reserve Bank of India fixed the reference rate for dollar at 61.4795 and for the Euro at 78.6630.
The rupee dipped against the pound to 98.88 from previous close of 97.86 and also tumbled to 78.90 per euro from 77.72. It plunged to 58.48 per 100 Japanese yen from 57.52 on Tuesday.
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