Rupee tumbles sharply by 59 paise to end week at 68.23 on fresh dollar demand

Saturday, Feb 13, 2016,12:01 IST By metrovaartha A A A

Mumbai | The rupee failed to maintain its last week’s gain against the American currency, tumbling sharply by 59 paise to end the week at 68.23 on fresh dollar demand from banks and importers in view of sharp fall in equities amid sustained foreign capital outflows.

The market benchmark Sensex crashed by 1,630.85 points or 6.62 per cent this week on concerns over global economy and mounting bad loans amid weak quarterly earnings of state-run banks.

The domestic unit resumed lower at 67.85 per dollar as against the last weekend’s level of 67.64 at the Interbank Foreign Exchange (Forex) market and fell further to fresh 29- month low of 68.4750 before finishing at 68.23 per dollar, disclosing a loss of 59 paise or 0.87 per cent. The rupee had gained by 14 paise or 0.21 per cent last weekend. The domestic currency hovered in a range of 67.7775 and 68.4750 per dollar during the week.

The rupee had slumped to its all-time closing low of 68.80 a dollar on August 28, 2013 after touching the record intra-day low of 68.85 the same day.

In New York, the US dollar firmed against the euro and yen Friday after better-than-expected retail sales suggested consumer spending the biggest driver of the economy was stronger than expected in January. The ICE Dollar Index, a measure of the dollar against a basket of major currencies, was up 0.4 per cent at 95.97, but was down 1 per cent over the week.

Meanwhile, Foreign portfolio investors (FPIs) pumped out net USD 351.39 million in first four days of week as per the SEBI’s record. In the forward market, premium for dollars declined on receipts from exporters. The benchmark six-month forward dollar premium payable in July fell to 196-198 paise from preceding weekend’s level of 202-204 paise and far-forward contracts maturing in January-2017 eased to 410-412 paise from 411-413 paise. The RBI fixed the reference rate for the USD at 68.4365 and the euro at 77.3606 from last weekend’s level of 67.6365 and 75.7326, respectively.

In cross-currency trade, rupee extended its fall against the pound sterling to 99.22 from last weekend’s level of 98.27 and also dropped further to 76.97 from 75.74 per euro previously. It also moved down against the Japanese Yen to 60.67 per 100 yen from 57.91 previously.