In its biggest single-day fall since September 2011, the Indian rupee plunged to a record new low on Monday, slipping below the 63-level mark against the US dollar on speculation that an improving American economy would prompt the US Fed to scale back its multi-billion-dollar stimulus much earlier than expected.
After hitting an all-time low of 63.30 against the dollar, the Indian currency finally closed the day at 63.13 per dollar, down 2.40 per cent, as several measures by the Reserve Bank in recent weeks to prop it up failed to revive sentiments.
The persistent weakness in the rupee also knocked down equities for the second consecutive day. “Problems on the domestic front and global uncertainties are putting severe pressure on the rupee,” said India Forex Advisors founder CEO Abhishek Goenka. “On the global front, US treasury yields are increasing, the dollar is trading flat, and markets are quite directionless.”