Rupee logs biggest loss in 2mths
The rupee on Thursday depreciated 39 paise, logging its biggest daily loss in nearly two months, to end at 61.34 versus the dollar on fears of capital outflows
Mumbai: The rupee on Thursday depreciated 39 paise, logging its biggest daily loss in nearly two months, to end at 61.34 versus the dollar on fears of capital outflows from emerging markets after Federal Reserve chief signalled a sooner than expected hike in US benchmark interest rates.
Last night, Federal Reserve chair Janet Yellen said the time-frame for raising interest rates could be on the order of around 6 months after the stimulus ends. The Fed also voted to cut its monthly bond purchases by USD 10 billion.
The dollar traded strong against its major global peers with the dollar index up 0.32 per cent.
Higher interest rates in the US may reduce the attractiveness of emerging market assets leading to outflows, said experts, adding that a US rate hike in mid-2015 is 6-7 months earlier than what markets had expected.
Fresh dollar demand from importers and some banks as well as weak local scrips also weighed on rupee today.
At the Interbank Foreign Exchange (Forex) market, the domestic unit resumed lower at 61.36 a dollar from previous close of 60.95. It tried to recover in afternoon deals to a high of 61.0650 on sustained dollar selling by exporters and some recovery in stocks.
However, it fell back to a low of 61.40 before concluding at 61.34 — a fall of 39 paise or 0.64 per cent. Previously, it had plunged 44 paise or 0.70 per cent on January 27.