Mumbai : The rupee plummeted by 31 paise to end at over two-year low of 65.31 against the US dollar on the back of consistent demand for greenback from importers and state-run banks. Sluggish trade data amid highly volatile global currency market sentiment in the aftermath of China’s yuan devaluation predominantly weighed on trade, forex dealers said.
Besides, fresh bouts of selling in local equities added pressure on the local currency. The dollar edged higher against other major currencies amid uncertainty over the impact of the yuan’s devaluation last week as well as global inflation expectations against the backdrop of Fed rate hike.
The rupee resumed lower at 65.12 as against last weekend’s level of 65 at the Interbank Foreign Exchange (Forex) market on good dollar demand amid higher greenback overseas as well as weak domestic equity markets. It kept falling during the trade to hit a fresh low of 65.36 before finishing at 65.31, showing a fall of 31 paise, or 0.48%. The domestic currency had recovered 10 paise after sliding for seven straight sessions to close at 65 against the US dollar in Friday’s trade.
The country’s exports contracted for the eighth straight month in July to USD 23.13 billion, pushing the trade deficit to USD 12.81 billion. Meanwhile, the fall season came back to haunt markets after the benchmark BSE Sensex took a knock of over 189 points and closed below the crucial 28,000-mark, mainly due to a slump in exports and a weakening rupee.
