Rupee hits nearly 39-month low at 68.84 against US dollar

demonetising Rs 500 and Rs 1,000 notes

The rupee weakened  fresh 39-month low of 68.84 against the US dollar in early trade today at the Interbank Foreign Exchange on sustained capital outflows amid the American currency strengthening overseas.

The rupee crashed to nearly 39-month low of 68.84, plummeting by by another 28 paise against the US dollar in early trade today amid sustained foreign fund outflows and the greenback’s surge in overseas markets.

The domestic currency had hit its all-time intra-day low of 68.85 and closed at 68.80 on August 28, 2013.

Forex dealers said besides a strong month-end demand for the American currency from importers, continued capital outflows by foreign funds and the dollar’s bull run on an imminent hike in Fed’s interest rates, mainly weighed on the domestic currency.

Further, a lower opening of the domestic equity market also put pressure on the rupee, they said.

The rupee had shed 31 paise to close at a new nine-month low of 68.56 against the dollar yesterday.

The Indian currency shrunk 2.92 per cent since Donald Trump’s victory in the US Presidential polls earlier this month.

A huge outflow of capital by foreign investors has been weakening the rupee as they apprehend an impact on the economy in the short-term following the India’s move to demonetise Rs 500 and Rs 1,000 banknotes. Surging US bond yields and a strong dollar overseas are also contributing to the rupee’s fall.

Meanwhile, the BSE Sensex fell by 145.97 points, or 0.56 per cent, to 25,905.84 points in early trade.