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Rupee posts worst single day fall in six and half months on Wednesday

06 Aug 2014 Evaluate

Indian rupee, snapping two consecutive sessions’ appreciating streak, posted its biggest single-day fall in six-and-half months on Wednesday on heavy dollar outflows from the domestic share and debt markets. Foreign funds have sold $363.48 million worth equities and $440.15 million worth of debt so far this month, bringing down total inflows so far this year to $25.60 billion. Meanwhile, sharp plunge of local equities, which was on account of risk-off sentiment after Reserve Bank of India underscored that it would continue to focus on bringing down inflation to meet its goal of reducing the consumer price index to 6% by January 2016 also weighed on the sentiment. On the global front, euro slipped to a nine-month low on Wednesday, extending its losses after data showed a sharp drop in German industrial orders, while the New Zealand dollar took a hit after a fall in dairy prices.

Finally the rupee ended at 61.50, weaker by 66 paise from its previous close of 60.84 on Tuesday. The currency touched a high and low of 61.53 and 61.06 respectively. The Reserve Bank of India’s (RBI) reference rate for the dollar stood at 61.33 and for Euro stood at 81.96 on August 06, 2014. While, the RBI’s reference rate for the Yen stood at 59.80, the reference rate for the Great Britain Pound (GBP) stood at 103.4370. The reference rates are based on 12 noon rates of a few select banks in Mumbai.

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