Indian rupee crashes 52 paise to 14-month low against US dollar

rupee

The rupee today nosedived 52 paise to hit a 14-month low of 66.90 against the US dollar, the third biggest single-day fall for the domestic currency this year, amid surging crude prices coupled with headwinds on the macro-economic front in form of widening trade deficit. This was the lowest closing for the rupee since February 22, 2017.

After a brief overnight recovery, the domestic unit tumbled following panic dollar buying by corporates and importers.

Even, suspected RBI intervention did little to save the rupee from plunging in the mid-afternoon trade but managed to prevent it from touching the psychological 67 level.

The rupee yesterday snapped its six-session losses to end higher by 10 paise at 66.38 against the US dollar.

The domestic currency has been caught in a free fall for last few sessions against the backdrop of surging global oil prices and consistent widening of trade deficit.

Besides, a massive exodus of capital outflows from both equity and debt market against the grim backdrop of US Federal Reserve's anticipated interest rate policy is just triggering panic, a forex dealer said.

The rupee has been the worst performing Asian currency this year after strengthening over 6 percent in 2017.

In the meantime, higher US bond yields which surpassed the key 3 percent mark continued support the US dollar and dominated currency markets worldwide.

However, brent crude, an international benchmark is trading lower at USD 72.60 a barrel.

After resuming sharply lower at 66.47 from overnight close of 66.38 at the inter-bank foreign exchange (forex) market, the rupee rapidly fell to touch a fresh intra-day low of 66.91 in late afternoon deals before concluding at 66.90, revealing a steep loss of 52 paise, or 0.78 percent.

The rupee had rebounded by 10 paise yesterday, after a six straight day fall.

The RBI, meanwhile, fixed the reference rate for the dollar at 66.6983 and for the euro at 81.4253.

The bond market encountered sell-offs after a brief recovery with the 10-year benchmark yield drifting back to 7.74 percent from 7.68 percent.

Meanwhile, domestic bourses succumbed to profit-taking after a two-straight day upmove as investors turned cautious ahead of F&O expiry in the derivatives segment.

The dollar index, which measures the greenback's value against a basket of six major currencies, was up at 90.97.

In the cross currency trade, the rupee retreated against the pound sterling to finish at 93.31 from Tuesday's close of 92.60 and fell back against the euro to settle at 81.54 as compared to 81.07.

The local unit also slumped against the Japanese yen to end at 61.31 per 100 yens from 61.01 earlier.

Elsewhere, the common currency euro staged a rebound following upbeat ECB comments despite strong greenback.

The pound sterling, on the other hand, traded little changed amid positive comments from the UK Brexit minister David Davis who expressed optimism about reaching a deal.

In forward market today, premium for dollar dropped due to sustained receiving from exporters. The benchmark six-month forward premium payable in August declined to 88-90 paise from 92-94 paise and the .