Mumbai:- The rupee went into a free fall today as it slumped for the fifth session and even hit an all-time low of 68.86 against the dollar as the demonetisation after-effect played out and concerns grew about a possible Fed rate hike in the near term.
However, a suspected RBI intervention stemmed the slide of the rupee, which recovered partially to end the day at 68.73 — a 39-month closing low.
If the same trend continues, analysts say, the rupee may even touch the 70 level in the near future.
The rupee opened lower at 68.74 per dollar as against yesterday’s closing level of 68.56 at the forex market and dropped to an all-time low of 68.86 before ending at 68.73.
As the rupee plunged to a record low today, the finance ministry stepped in and said it is closely monitoring the currency movement.
The impact of the note ban, continued foreign outflows, a stronger dollar overseas and rising yields in the US continued to cast their shadow on the rupee.
The rupee had dropped 91 paise, or 1.34 per cent, in five trading days. The domestic unit was last seen at this level when it traded at 68.85 intra-day and ended 68.80 on August 28, 2013.
It moved in a range of 68.58 and 68.86 during the day.
Foreign funds going on a selling spree from emerging markets on expectations of a rate hike next month by the US Fed and rupee volatility following the domestic demonetisation drive to curb black money added to the pressure, dealers said.
The dollar Index was trading lower by 0.20 per cent against a basket of six currencies.
In the overseas market, the dollar hovered near fresh 13-year highs today before backing down slightly after solid US economic indicators and Federal Reserve meeting minutes underpinned speculation for an interest rate rise.
PTI
