Rupee Tumbles 74 Paise, Logs First Loss In Four Sessions
The Indian rupee on Wednesday fell 74 paise to close at 70.17 against the U.S. dollar amid strengthening of the greenback and heavy selling in domestic equities.
At the Interbank Foreign Exchange market, the rupee opened lower at 69.60 and fell further to touch the day's low of 70.24 a dollar. On Tuesday, the rupee had appreciated 34 paise to 69.43 against the dollar.
Forex traders attributed the rupee fall to strong dollar against major global currencies overseas, fall in domestic equities and weak Goods and Services Tax collections. Falling crude oil prices, however, supported the rupee and capped the losses to some extent.
"Weak GST collections and concerns around fiscal budget targets added to investor concerns. As a result, the Indian rupee was one of the worst performing emerging market currencies with around 0.9 percent fall," said Sunil Sharma, Chief Investment Officer, Sanctum Wealth Management.
Sharma further said that crude holding on to the low prices is the silver lining and bodes well for a recovery in consumer demand in coming months as prices trickle down to the pump.
GST collections dropped to Rs 94,726 crore in December 2018, lower than Rs 97,637 crore collected in the previous month. Brent crude, the global benchmark, was trading lower at 53.34 per barrel, lower by 0.86 percent.
Meanwhile, the dollar index was trading higher by 0.26 percent at 96.33 against a basket of six currencies in the late afternoon trade. Meanwhile, foreign funds pulled out Rs 621.06 crore from the capital markets on a net basis, while domestic institutional investors sold shares worth Rs 226.18 crore Wednesday, provisional data showed.
The BSE index finished lower by 363.05 points, or 1 percent, at 35,891.52. Similarly, the broader NSE Nifty plunged 117.60 points, or 1.08 percent, to settle at 10,792.50.