Tushar Goenka & Utsav Saxena The rupee crashed to new lows on Wednesday, falling through the 73 mark to close at 73.34 against the dollar. The currency markets were spooked by rising crude oil prices, hovering around $85 per barrel that could exacerbate the twin deficits problem. India\u2019s current account deficit (CAD) is now expected to widen to around $85 billion in 2018-19, up from $45 billion in 2017-18. With importers rushing to cover, the premium on three-month forward contracts jumped 3 basis points (bps) over Monday\u2019s close to around 4.5%, up from levels of 4.407% in early August. Meanwhile, bonds sold off sending the benchmark yield to 8.11% despite assurances of adequate liquidity support from the Reserve Bank of India (RBI). Indranil Sengupta, economist, Bank of America, estimates the liquidity deficit in the money markets will average Rs 50,000 crore in the December quarter even after Rs 90,000 crore of OMO and Rs 10,000 crore cut in the net borrowings by government in H2FY19. Banking system liquidity in recent weeks has been pressured by the RBI\u2019s intervention in the forex market to stem the rupee depreciation, economists said, as also a mismatch in the assets and liabilities of NBFCs and a pick-up in credit demand. Stocks sank as nervous investors took risk of the table anxious corporate profits would slow in a hugely over-valued market. The Sensex lost 551points to close below the 36,000 mark at 35,975.63. More than 77% of the stocks in a universe of companies with a market capitalisation of Rs 1,000 crore or more have lost value since January 1. Foreign portfolio investors (FPI) are understood to have sold some $215 million worth of equities on Wednesday taking the sales since April to $4.7 billion. While the combination of the rupee at below 73 levels and bond yields at 8.1% should have been a mouth-watering one for foreign debt investors, currency market experts were unwilling to call a bottom for the Indian currency. Foreign funds sold $1.2 billion worth of bonds in September, taking the total sales since April to $7.3billion. While some of the depreciation in the rupee has taken place in sympathy with the fall in the values of other emerging market (EM) currencies, the sharp fall on Wednesday, when it lost 43 paise, has made the market jittery. Late in the evening, the RBI announced easier foreign currency borrowing norms for oil companies. However, during the day markets were confused by rumours the government and the RBI had agreed on a special dollar window for the oil marketing companies (OMCs). Meanwhile the bond markets are pricing in a 25 basis point hike in the repo rate by the central bank on Friday. The RBI has attempted to reassure the money markets by assuring them of liquidity. The RBI had on Monday morning announced Rs 36,000 crore worth of open market operations but there are fears the defaults by some non-bank lenders could cause contagion.