Mumbai:- Experiencing its worst day in about 10 months, the rupee today fell by a massive 69 paise to end at more than one-month low of 64.84 against the US dollar amid heightened global volatility.
This was the biggest single-day slump for the domestic currency since July 26, 2016.
Domestic bourses too succumbed to frantic profit-taking after their three-consecutive days of record-breaking spree amid sell-off in the global financial markets in the midst of emerging US political uncertainty.
Equities and forex trading saw a tepid response as investors fretted over the latest turmoil in the US anticipating diversion in President Trump’s pro-business agenda.
At the Interbank Foreign Exchange market, the local unit resumed sharply lower at 64.34 from overnight closing level of 64.15 on frantic demand from the greenback from banks and importers.
It remained under immense pressure throughout the day and collapsed to hit sessions’ lowest level of 64.91 in late afternoon deal before ending the day at 64.84 with a huge 69 paise slide or 1.06 per cent – the lowest closing since April 5, 2017 when it had settled at 64.87 per dollar.
Domestic currency traders and investors took a cautious note of the latest political developments in the US after some reports suggested that President Donald Trump tried to influence federal investigation and the appointment of a special counsel to head the probe into Russia’s possible involvement in last year’s US elections.
The US dollar wallowed near six-month lows against a basket of major currencies, struggling to recover from its worst losses in almost a year against the yen and the euro.
The flagship Sensex tumbled 224 points to finish at 30,434.79, while broader Nifty plunged over 96 points to 9,429.45.
Market participants are highly cautious at this juncture and the potential impact on the country’s currency as India will not be immune if global volatility increases, a forex dealer said.
The RBI, meanwhile, fixed the reference rate for the dollar at 64.3441 and for the euro at 71.6214.
The dollar index, which tracks the US currency against a basket of six major rivals, was up 0.27 per cent at 97.61.
In cross-currency trades, the rupee slumped further against the pound sterling to finish at 84.49 from 83.13 per pound and dropped against the euro to close at 72.15 as compared to 71.24 earlier.
It also plummeted against the Japanese yen to end at at 58.54 per 100 yens from 57.07 yesterday.
In forward market today, premium for dollar remained weak owing to sustained receivings from exporters.
The benchmark six-month premium payable in October edged lower to 141-142 paise from 144-146 paise and the far forward April 2018 contract also declined to 293-295 paise from 301- 303 paise on Wednesday.
In the international commodity front, crude prices extended their streak of losses on Thursday as the market remained well supplied with crude despite efforts by OPEC and other big exporters to curb production and support prices.
The brent crude was down 17 cents at USD 52.04 a barrel in early Asian trade.
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© 2016 State Times Daily Newspaper