MUMBAI, November 23: Extending its losses for the fourth day, the rupee on Wednesday tumbled by 31 paise to close at fresh nine-month low of 68.56 against the dollar due to persistent capital outflows amid a resurgent US currency in global markets.
The forex market sentiment turned highly fragile due to consistent unwinding by foreign investors against the backdrop of demonetisation as well as renewed Fed rate hike fears.
Robust month-end dollar demand from oil companies along with aggressive hedging strategy adopted by importers in the wake of currency volatility also weighed on the rupee trade, a forex dealer said.
Some caution ahead of the FOMC meeting minutes later in the day also dampened rupee trade, he added.
The Indian currency has fallen by 2.91 per cent since Donald Trump’s victory in the US Presidential polls earlier this month mainly due to huge capital outflows after surging US bond yields and a strong dollar.
At the Interbank Foreign Exchange (forex) market, the rupee opened substantially weak at 68.36 from Tuesday’s closing value of 68.25 and kept descending throughout the day with high amount of volatility.It hit intra-day low of 68.58 in late afternoon deals before ending at 68.56 -- the level not seen since February 26, when it had ended at 68.62 -- showing a sharp loss of 31 paise, or 0.45 paise.
The rupee marked its lowest value of 68.85 against the dollar in August 2013.
In worldwide trade, the greenback traded little changed at its overnight 13-1/2-year peak, taking a breather ahead of the US Thanksgiving holiday. The dollar Index was quoted higher at 101.20 in afternoon trade.
Meanwhile, the RBI on Wednesday fixed the reference rate for the dollar at 68.4772 and euro at 72.7844.
In cross-currency trades, the rupee rebounded against the pound sterling to settle at 84.98 from 85.01, but fell back against the euro to end at 72.91 as compared to 72.62 on Tuesday.
The home unit also edged lower against the Japanese yen to finish at 61.75 from 61.62 per 100 yens earlier.
