The rupee on Monday plunged by 43 paise to close at nearly one-month low of 70.92 against the US dollar amid weak industrial output growth data, fall in domestic equity markets and sustained foreign fund outflows. A weak US dollar against major global currencies and fall in crude oil prices, however, capped losses of the domestic currency.
At the Interbank Foreign Exchange (forex), the rupee opened on a firm note at 70.50 and touched a high of 70.44 per US dollar in early trade.
But it pared early gains later and fell to an intra-day low of 70.95 against the US dollar. The domestic currency, however, recovered some lost ground and finally settled for the day at 70.92 per dollar, down 43 paise over its previous closing. This is the lowest closing level since December 17 when the rupee closed at 71.56 per dollar.
On Friday, the rupee had weakened by 8 paise to close at 70.49 against the US dollar. HDFC Securities Head PCG & Capital Markets Strategy V K Sharma said weaker economic data, fall in domestic equity and foreign fund outflow weighed on the rupee sentiment.
Industrial output growth dropped to a 17-month low of 0.5 per cent in November on account of contraction in the manufacturing sector, particularly consumer and capital goods.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, dipped 0.11 per cent to 95.56 in late afternoon trade.
Brent crude, the global benchmark, was trading at USD 59.63 per barrel, lower by 1.41 per cent.
Meanwhile, foreign funds sold shares worth Rs 687.20 crore on a net basis Friday, while domestic institutional investors bought equities to the tune of Rs 123.17 crore, provisional data showed.
The Financial Benchmark India Private Ltd (FBIL) set the reference rate for the rupee/dollar at 70.8244 and for rupee/euro at 81.2469. The reference rate for rupee/British pound was fixed at 90.9640 and for rupee/100 Japanese yen at 65.50.