Mumbai: Indian rupee on October 16 plummeted to 61.93 and closed 42 paise down at over seven-month low of 61.83 against the greenback on heavy capital outflows and a spike in demand for US dollars.
The dollar index was up by a whopping 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 61.83, logging a loss of 42 paise or 0.68 per cent.
The October 16 close is the rupee's weakest level since 61.85 on March 4, 2014. "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.
The Indian benchmark S&P BSE Sensex on October 16 closed sharply down by 349.99 points, or 1.33 per cent to end below 26K-mark for the first time after two months. Overseas investors, acoording to provisional data, sold equities worth over Rs 1,100 crore after about Rs 700-crore sell-off on Tuesday. Pramit Brahmbhatt, Veracity Group CEO, said: "Rupee traded weak today taking cues from weak local equities and strong dollar."
