• News
  • Columns
  • Interviews
  • BW Communities
  • BW TV
  • Subscribe to Print
BW Businessworld

Rupee Tumbles To All-Time Low of 53.84

Photo Credit :

The rupee on Wednesday closed at all-time low of 53.84 losing a hefty 72 paise against dollar due to sustained demand for the US currency which rose sharply against major rivals after poll results in Greece and France fueled fresh eurozone worries.

Forex dealers said signs of strong capital outflows also weighed against rupee sentiment. They further said that rupee is expected to breach the 54 level by weekend given the current global situation.

RBI is believed to have intervened when the rupee fell to 53.80 level but could not stem the fall.

At the Interbank Foreign Exchange (Forex) market, the rupee opened lower at 53.54 per dollar and fell further to intra-day low of 53.85 per dollar. It closed at 53.84 per dollar, showing a loss of 72 paise. The previous lowest closing was at 53.71 on December 14, 2011.

"The fall in rupee today is due to three factors. Firstly, dollar strengthened against other currencies, especially euro, and secondly, a weak stock market contributed towards the rupee fall," J Moses Harding, Head of Global Markets Group of IndusInd Bank.

Euro fell to over three-month low against dollar on fears that Greece could leave the eurozone.

With Greece's Sunday general election results throwing up no clear winner, US dollar gained today amid Alexis Tsipras, leader of the Radical Left Coalition claiming that the verdict renders the Greek bailout deal null.

On rupee fall, Indian Overseas Bank GM (Treasury) T S Srinivasan said, "Rupee has seen weakness today in sync with euro weakening against dollar. Today's fall is more due to international factors than domestic. Also, subdued capital flows to equity market had contributed to the fall."

Rupee may breach 54-level in the near term given the persistent weakness in the currency, he added.

On RBI's intervention, Harding said given the liquidity condition, there is not much scope for RBI to intervene.

Harding, however, said fall in crude oil prices will not aggravate situations in the fiscal deficit front.

P Rajaram Karanth, GM (Treasury) of Corporation Bank said that rupee might breach Rs 54 level per dollar by end of this week if the euro continues to weaken against dollar.

Expressing similar views, Ashok Mittal, CEO of Emkay Comtrade, said, "Rupee will weaken further and may touch a level of 54.60- 54.80 per dollar in the near term. By end June, it may slide to Rs 56 level if the fundamentals don't improve."

"RBI doesn't seem to be defending any level but will intervene as it had two days back, in case of excess volatility. But our perception is that it may not intervene frequently," he added.

The BSE benchmark Sensex today closed down by 66.60 points or 0.40 per cent.

The rupee premium for the forward dollar ended steady to eased.

The benchmark six-month forward dollar premium payable in October closed at its overnight level of 172-174 paise, while far-farward contracts maturing in April softened to 304-306 paise from 305-307 paise previously.

The RBI fixed the reference rate for the US dollar at 53.4600 and for euro at 69.4005.

The rupee dropped further to 86.74 against the pound sterling from overnight close of 85.84 and also drifted lower at 69.82 per euro from 69.22. It tumbled against the Japanese yen to 67.77 per 100 yen from last close of 66.59.