Rupee breaches 63, hits new low

Our Bureau Updated - March 12, 2018 at 04:53 PM.

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Falling over 2.6 per cent from its previous close, the rupee breached the 63-mark hitting a historic low of 63.30 against the dollar. The rupee closed at life-time low 63.13 per dollar on account of heavy capital outflows from the domestic equity market.

Despite the Reserve Bank of India’s measures to restrict capital outflows, the rupee fell 165 paise on Monday as heavy outflows weighed on the currency.

The domestic unit opened at 62.30 from Friday’s close of 61.66 per dollar. The unit moved in the range of 62.21 and 63.30 against the American currency. This is the biggest intra-day low in a decade.

BSE-benchmark Sensex ended lower by 290.66 points (1.56 per cent) to close at 18,307.52 points.

Strong demand for dollar from banks and importers also added to the negative sentiment.

According to dealers, heavy FII outflows from the domestic equity market have been weighing on the currency. The dollar saw rising demand from importers as the currency market remained closed over the weekend.

A treasury head of a public sector bank said the RBI measures have been ineffective and fresh concrete measures need to be addressed. The market needs more FII inflows to the extent of $1 billion for the rupee to recover back to the 60-level, the official said.

Market players say the continuous slide in the rupee can only be halted if the Government hikes the import duty on non-essential goods such as mobile phones and electronic items.

The rupee has fallen about 5 per cent this month.

Call Rates, G-secs

The benchmark 7.16 per cent government security, which matures in 2023, fell sharply by Rs 2 to Rs 86.87 from Rs 88.89. Yields on the security jumped to close at 9.22 per cent from its previous close of 8.88 per cent.

A rise in the yields on G-Secs is likely to have negative impact on the margins of banks due to their investments in the government securities.

The call money rates, rate at which banks borrow from each other for short term funding, ended a tad higher at 10.25 per cent from Friday’s close of 10.20 per cent.

Published on August 19, 2013 11:34