Rupee plunges to 1 week low; falls 14 paise to 63.60

A massive rout in financial markets and commodities worldwide jolted by Chinese stock bubble burst weighed on the local currency

Falling for a second day, the rupee on Wednesday depreciated by 14 paise to close at over one-week low of 63.60 against the US currency, on steady dollar demand from public sector banks (PSBs) and importers.

A massive rout in financial markets and commodities worldwide, jolted by a Chinese stock bubble burst, also weighed on the local currency, a forex dealer said.

However, the weakness in the US dollar against other Asian currencies limited the rupee’s slide. In foreign trade, the dollar retreated from its one-month high, pressured by stronger yen and fresh hopes for a solution to the debt crisis in Greece. The domestic currency opened substantially lower at 63.55 to a dollar, compared with the previous closing level of 63.46 at the Interbank Foreign Exchange market, on heavy dollar demand from banks and importers amid sharp fall in the domestic equity market.

It drifted further to hit a fresh intra-day low of 63.64 before ending at 63.60, showing a fall of 14 paise, or 0.22 per cent — the level not seen since June 24, this year.

The rupee touched a high of 63.52 during the trade. The BSE Sensex nosedived by about 484 points, or 1.72 per cent, to settle at 27,687.

The US dollar index was down by 0.1 per cent to 96.77.

Oil bounced back from a three-month low to around $57 a barrel on Wednesday, after an industry report showed a larger-than-forecast drop in US crude stocks and also Iran nuclear talks failed to produce a deal.  In the forward market, the premium for dollar ended marginally higher on mild buying pressure from corporates. The benchmark six-month premium payable in December held steady at Rs 2.15-2.17, while for June 2016 contract, it edged up to Rs 4.36-4.38, from Rs 4.35-4.37 on Tuesday.,

The rupee firmed up further against the pound sterling to 97.73, from 98.08. However, the domestic unit fell back to 70.01 a euro against 69.57 and slumped further against the Japanese currency to 52.27 per 100 yen, compared with 51.84 on Tuesday.