 "Rupee tumbles to 7-month low")
The rupee on Thursday plummeted to 61.93 and closed 43 paise down at over a seven-month low of 61.85 against the greenback on heavy capital outflows and a spike in demand for US dollars.
The dollar index was up by 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 61.85, logging a loss of 43 paise. The rupee had last closed at 61.85 to the dollar on March 4.
Worries that foreign investors would reduce their exposure are starting to weigh on sentiment, after strong buying in shares and debt had helped support the rupee so far this year. The Reserve Bank of India (RBI) had been active in the market for most of the day, but stepped up intervention as the rupee threatened to breach the 62-mark, traders said.
"When they have catching up to do, the rupee and stocks traditionally overdo it," he added, pointing out that the rupee and shares would continue to be under pressure in the coming sessions.
"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.
Pramit Brahmbhatt, Veracity Group CEO, said: "Rupee traded weak today (Thursday) 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.
The dollar index was up by 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 61.85, logging a loss of 43 paise. The rupee had last closed at 61.85 to the dollar on March 4.
Worries that foreign investors would reduce their exposure are starting to weigh on sentiment, after strong buying in shares and debt had helped support the rupee so far this year. The Reserve Bank of India (RBI) had been active in the market for most of the day, but stepped up intervention as the rupee threatened to breach the 62-mark, traders said.
"When they have catching up to do, the rupee and stocks traditionally overdo it," he added, pointing out that the rupee and shares would continue to be under pressure in the coming sessions.
"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.
Pramit Brahmbhatt, Veracity Group CEO, said: "Rupee traded weak today (Thursday) 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.