Rupee tumbles 16 paise to 71.4 per dollar in third straight session of loss

The rupee skidded by 16 paise Tuesday -- its third straight session of loss -- to close at 71.44 against the US dollar amid strengthening of the greenback and heavy selling in domestic equities.

Concerns over slowing global growth and foreign capital outflows weighed on the local unit, forex traders said.

At the Interbank Foreign Exchange (forex) market, the rupee opened higher at 71.22 but came under selling pressure. It finally finished at 71.44 per dollar, down by 16 paise against its previous close.

The rupee has now lost 41 paise in three days.

"Rupee continued to trend down for the third day on global growth concerns. IMF predicted global economy will grow at the weakest pace in three years in 2019 and warned fresh trade tensions would spell further trouble.

"The benchmark 10-year bond yield held steady around Tuesday's level of 7.30 per cent. So far this month, the rupee has declined 1.87 per cent, while overseas funds sold $554.5 million in equity and $193.10 million in debt segments," said V K Sharma, Head PCG and Capital Markets Strategy, HDFC Securities.

Worries about slower global growth, little progress in US-China trade talks and US federal government shutdown triggered safe heaven buying and helped the greenback and Japanese yen trade higher. The dollar index headed higher for the sixth day, its longest streak after October 2018, he added.

Brent crude, the global oil benchmark, was trading lower at $61.51 per barrel, down by 1.96 per cent.

The domestic equity market took a breather Tuesday after a five-day rising spree. The 30-share BSE Sensex dropped 134.32 points to end at 36,444.64, while the broader NSE Nifty finished 39.10 points lower at 10,922.75.

Meanwhile, foreign funds pulled out Rs 299.79 crore from the capital markets on a net basis Monday, while domestic institutional investors bought shares worth Rs 520.80 crore, provisional data showed.

The Financial Benchmark India Private Ltd (FBIL) set the reference rate for the rupee/dollar at 71.3761 and for rupee/euro at 81.0438. The reference rate for rupee/British pound was fixed at 91.8963 and for rupee/100 Japanese yen at 65.23.