Continuing its weakness for the fifth session, the rupee dipped below the 64-mark to end at 20 months’ low of 64.23 against the American currency on sustained capital outflows by foreign funds.
Sustained dollar demand from importers and banks kept pressure on the Indian unit, forex dealers said.
Recent surge in crude oil prices globally too weighed on the rupee, however, dollar’s weakness overseas, capped losses in the local unit, they said.
Persistent foreign funds outflows, weighed down by lingering concerns over MAT and delay in passage of key tax reform bills in Parliament dragged down the rupee to 20-month lows.
The rupee opened lower at 63.78 as against last closing level of 63.54 at the Interbank Foreign Exchange (Forex) market, later it slid further to breach 64-level to trade at 64.28 at mid-session before concluding at 64.23 per dollar, showing a loss of 69 paise or 1.09 per cent.
This is the weakest close of Indian currency since September 6, 2013, when it was closed at 65.24.
The domestic currency has dropped by 108 paise or 1.71 pct in the five sessions. It moved in a range of 63.69 and 64.28 per dollar during the day.
However, Crude oil prices fell by 56 cents to USD 67.21 in early Asian trade after hitting 2015-high in the previous session.
The Indian benchmark Sensex dropped further by 118.26 or 0.44 per cent today.
In the New York market, the dollar finished sharply lower against the euro yesterday after payrolls processor ADP released an April employment number that was much weaker than the market had expected, stirring concerns that the US remains in a state of economic uneasiness.
The dollar index was up by 0.02 per cent today against its six major global rivals.
Pramit Brahmbhatt, Veracity Group CEO, said, “Today, the rupee depreciated nearly seventy paise taking cues from concerns over the government’s taxation policies which will reduce the attraction of local assets for foreign institutions. The rupee lost over 1 percent and ended at 64.23, which is the lowest level in 20 months.”
The trading range for the Spot USD/INR pair is expected to be within 63.80 to 64.60, he added.
In the forward market, the premium ended mixed due to uneven demand and supply transactions.
The benchmark six-month premium payable in October eased to 225-226 paise from 225-227 paise while forward contracts maturing in April 2016 finished higher at 443-445 paise as against 438.5-440.5 paise yesterday.
The Reserve Bank of India fixed the reference rate for dollar at 63.8800 and for the euro at 72.5102.
The rupee dropped further against the pound sterling at 97.83 from 96.66 previously and fell against the euro to 72.82 from 71.30.
It also moved down against the Japanese yen to 53.92 per 100 yen from 53.03 yesterday.