Mumbai: The rupee struggled to maintain its earlier red-hot form as it came strikingly close to the 69 mark against the dollar towards the end of 2016, from the year's high of 66.25 in September, with over USD 2 billion pullout by FIIs taking a big toll.
The local unit touched a low of 68.90 (intra-day) in November before recovering to end at 67.74 on December 26, 2016, as against its close of 66.15 last year-end, a net loss of 2.40 per cent.
Redemption of foreign currency non-resident (FCNR) deposits in November made mood all the more cloudy even as the central bank went for the status quo following foreign capital outflows, largely due to narrowing of interest rate differential between the US and India.
Foreign investors withdrew USD 6.47 billion from the debt segment while there was a fairly good inflow of USD 4.01 billion in equities, taking net outflow to over USD 2 billion.
There is already a talk of the rupee going below the 70 mark in coming days as the impact of demonetisation plays out in GDP and industrial production numbers in the next couple of quarters, Abhishek Goenka, CEO and founder of IFA Global, a leading forex and treasury solutions firm, told PTI.
He said any hiccups in Chinese economy and the overall strength of the dollar will continue to be a drag on the rupee in the coming year.
