Rupee closes at all-time low of 58.77

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thdvrMumbai, June 18:Resuming its downfall, the rupee on Tuesday sank by a whopping 90 paise to all-time closing low of 58.77 on massive dollar buying by banks and importers as forex markets became jittery ahead of Fed’s decision on continuing monetary stimulus.

Capital outflows also affected the market sentiment with FIIs offloading shares worth over Rs 750 crore in two days, amid talks of continuing sell-off in debt as well. Since May-end, FIIs have sold around USD 5 billion debt securities.

Rupee resumed lower at 58.25 per dollar as against the last closing level of 57.87 per dollar at the Interbank Foreign Exchange Market. It dropped further to a low of 58.81 on concern that US Federal Reserve will indicate a reduction in asset purchases that boosted inflows to emerging markets.

Rupee finally ended at 58.77 per dollar, showing a loss of 90 paise or 1.56 per cent. On June 11, the rupee hit its all-time low of 58.98/99 intra-day but closed at 58.39.

In the global market, dollar gained against major rivals on prospects of a cut in the country’s interest rate. In London, dollar rose in early trade and was trading above recent two-month lows against the yen, with further gains dependent on US Fed guidance monetary stimulus to prop up the economy.

Participants were cautious as global markets keenly awaited decisions from the US Fed, whose two-day policy meeting starts today. Investors are looking for signals if Fed will taper USD 85 billion in monthly bond purchases after US economy showed some recovery in recent weeks.

Meanwhile, crude oil prices rose in the Asian trade on Tuesday, fuelled by growing concern over the Syrian conflict and political unrest in Turkey. The Indian stock market benchmark Sensex dropped by 102.59 points, or 0.53 per cent, to end today at 19,223.28.

Premium for forward dollar improved further on sustained paying pressure from banks and corporates.

Benchmark six-month forward dollar premium payable in November edged up to 151-1/2-153-1/2 paise from yesterday’s close of 151-152 paise and far-forward contracts maturing in May also finished higher at 307-309 paise from 301-1/2-303-1/2 paise.

The RBI fixed the reference rate for the US dollar at 58.4515 and for the euro at 77.9110.

Rupee remained sharply weak against the pound sterling to 91.80 from yesterday’s close of 90.94 and also dropped further against the euro to 78.59 from 77.20. It also declined further against the Japanese yen to 61.67 per 100 yen from 61.04

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