The rupee plunged to a fresh low on Thursday hitting 73.76 per dollar in the early trade as sharp rise in oil prices heaped more pressure on the currency.
The rupee plunged to a fresh low on Thursday hitting 73.76 per dollar in the early trade as global oil prices continued to rise, deepening concerns about the current account deficit and capital outflows. The partially convertible rupee closed at 73.33 on Wednesday. Amid fall in domestic currency, benchmark 10-year bond yields hit 8.20 percent in opening trade as against previous close of 8.11 percent. RBI has likely sold dollars through state-run banks at around 73.80 per dollar levels to prevent further slide in the currency, Reuters reported citing traders.
Meanwhile, yesterday, the rupee closed at a record low of 73.34, down by 43 paise or 0.59 per cent at the interbank foreign exchange. In intra-day trade, the rupee had crashed to its all-time low of 73.42 per dollar as crude oil prices breached the $85 per barrel mark, leading to huge outflows of cash. Investors remained concerned over sustained foreign capital outflows and soaring crude oil prices.
RBI on Wednesday relaxed policy on borrowing from overseas to allow state-owned fuel retailers to raise up to $10 billion external debt for working capital needs. Till now oil marketing companies were not allowed to raise external commercial borrowing (ECB) for working capital needs on a long-term basis. They could raise a maximum of one-year overseas loan by way of buyers credit, repay it within 12 months and raise it again thereafter.
The BSE Sensex plunged 600 points to an intra-day low of 35,341.68 points in early trade on Thursday. The Nifty plunged to a three-month low, slipping below the 10,700 level on huge sell-off across all sectors. Reliance Industries, HDFC twins, TCS, ICICI Bank, Infosys, HUL and Kotak Bank were the top drags on the Sensex in early morning trade deals.