The rupee declined 15 paise to close at a new lifetime low of 79.60 (provisional) against the US dollar on Tuesday as a strong greenback overseas and weakness in domestic equities continued to weigh on investor sentiments.
At the interbank forex market, the local unit opened weak at 79.55 against the greenback and witnessed an intra-day high of 79.53 and a low of 79.66.
It finally settled at 79.60 (provisional), down 15 paise over its previous close of 79.45. The dollar index, which measures the greenback’s strength against a basket of six currencies, advanced 0.48 per cent to 108.54.
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According to Reuters, the Reserve Bank of India (RBI) was expected to sell dollars via state-run banks to prevent runaway depreciation as it has in recent months. But the RBI has also made clear it would only intervene to prevent “jerky movements” in the currency and not fight a global trend, which is the case.
Indeed, the capital exodus from assets denominated by almost any other currency and into the safe-haven greenback was evident as the dollar index, which tracks the currency against a basket of six peers, rose to 108.47, the highest since October 2002.
On the domestic equity market front, the BSE Sensex ended 508.62 points or 0.94 per cent lower at 53,886.61, while the broader NSE Nifty fell 157.70 points or 0.97 per cent to 16,058.30.
Brent crude futures, the global oil benchmark, fell 2.27 per cent to $104.67 per barrel.
Foreign institutional investors were net sellers in the capital market on Monday as they sold shares worth Rs 170.51 crore, as per exchange data.