The rupee fell 90 paise yesterday to close at an all-time low of 58.77 against the dollar on Tuesday amidst heavy capital outflows, dollar demand from oil importers and banks, and worry over scaling back by the US Federal Reserve of monetary stimulus.
The rupee is trading at 58.83 on weak equity market and persistent capital outflows.
“The first four months of 2014 saw over $3.6 billion of inflows in the Indian debt segment and between May and June till date, over $3.5 billion has moved out. Such a sharp outflow within such a short period continues to pressure the rupee,” Anindya Banerjee, currency analyst, Kotak Securities.
The rupee is expected to remain vulnerable ahead of the outcome of the US Federal Reserve's two-day meeting on monetary policy starting Tuesday. The US Fed had hinted at scaling down its quantitative easing programme, and this is likely to trigger outflows from India thereby putting pressure on the rupee.
The RBI has cautioned that shifts in global market sentiment can trigger a sudden stop or a reversal of capital from across emerging economies.
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