The rupee ended at a fresh low of 61.30 on Wednesday, down sharply by 53 paise from its previous close of 60.77 on weak global and domestic equity markets.
Weak markets
“Weakness in the domestic equity market and comments by the Federal Open Market Committee members led to a sell-off in the global stock markets which impacted the rupee,” said a treasury dealer with a public sector bank.
According to Ashish Parthasarthy, Treasury Head, HDFC Bank, said, “The basic causes such as widening current account deficit, higher imports and capital outflows among others are known. The underlying fundamentals need to be addressed.”
The domestic unit opened sharply lower at 61.15 per dollar. Intra-day, it touched a low of 61.45. In the afternoon trades, it recovered to 60.90 on expectations of further measures by the government.
However, with uncertainty on the measures and weaker global and domestic equity markets, the rupee fell to its closing low.
On Monday, the rupee had touched an all-time low of 61.80 against the dollar but recovered in the last hour of trading post the announcement of the new RBI Governor.
Market analysts expect the rupee to continue its depreciation bias amid weak fundamentals in the short term.
CALL RATES, BOND YIELDS
The inter-bank call money rates, the rates at which banks borrow short-term funds from each other, ended higher at 10.20 per cent from the previous close 9 per cent.
The benchmark 7.16 per cent government security, which matures in 2023, ended lower at Rs 93.47 from the previous close of Rs 93.09. Yields on the security softened to 8.13 per cent from the previous close of 8.19 per cent.