Re breaches 63-level vs USD;down 148p in decade’s biggest drop
Mumbai: Continuing its free fall, the rupee on Monday breached 63-mark a dollar to end at record low of 63.13, recording the decade's worst single-day fall of 148 paise, heightening fears that more capital control steps could be in the offing.
Weighed down by heavy dollar demand and fall in stocks markets, the rupee fell to historic intra-day low of 63.30.
At the Interbank Foreign Exchange (Forex) market, the local currency opened sharply lower at 62.30 a dollar from its previous close of 61.65 but tried to recover later to a high of 62.21. Rupee again turned negative and finally ended at 63.13, logging a fall of a massive 148 paise or 2.40 per cent.
The previous biggest fall in decade was the 124 paise or 2.57 per cent plunge on September 22, 2011.
Forex dealers said that overseas investors sat on the sideline on caution ahead of the release of the minutes of The Federal Open Market Committee on August 21.
"Big demand from oil companies was there since morning.
Apart from state-run banks, private and foreing banks were also bidding for dollars," said Srinivasa Raghavan, Executive Vice-President (Treasury), Dhanlaxmi Bank said.
Sentimentwise rupee falling to 63.30 will further be negative for market sentiment, said Ajay Marwaha, Executive Vice President and Head, Trading, in the Treasury, HDFC Bank.
In order to arrest the rupee slide, RBI last week had announced measures such as restricition on Indian firms investing abroad and on outward remittances by resident Indians, triggering talks of return of capital control regime.
Dealers said the FOMC minutes to be released on August 21 will likely give an indication on when the US Federal Reserve will start withdrawing it's monthly asset purchase programme.
Meanwhile, the Indian benchmark S&P BSE Sensex today fell by 291 points, or 1.56 per cent, after its overnight fall of 769 points. FIIs pulled out Rs 563.23 crore on last Friday as per provisional data with stock exchanges.
The dollar edged modestly higher against a basket of six major currencies.