RUPEE AGAIN BREACHES 60 MARK

Continuing its downslide for the third straight day, rupee today plunged by 55 paise to close at 60.21 due to fresh capital outflows and sustained dollar demand from importers, even as RBI intervened in the fag-end to arrest the currency fall. The rupee commenced lower at 59.87 a dollar from previous close of 59.66 and immediately touched a high of 59.84 at the Interbank Foreign Exchange (Forex) market. It, later, turned negative and tumbled to a low of 60.39 as global markets panicked on the back of multiple reasons including slowing Chinese growth, political tension in Portugal and the signs of issues in the Eurozone. However, suspected RBI intervention helped the rupee to close a tad better at 60.21, showing a fall of 55 paise or 0.92 per cent over Tuesday's closing level. In three days, rupee has slumped by 82 paise or 1.38 per cent. Previously, it had registered closing all-time low of 60.72 and also an intra-day historic low of 60.76 on June 26. Heavy dollar buying by importers, mainly oil refiners, following sharp rise in global crude oil prices weighed on the rupee. Brent oil hit one-week high of USD 105 a barrel. N S Venkatesh Treasury Head of IDBI Bank said:" Rupee depreciated today as dollar strengthened against all major currencies. Also, equity market performance put some pressure on the domestic currency. However, we saw some selling of dollars from exporters and foreign banks." A weaker local currency can add to inflationary pressure, widen the fiscal deficit and slow capital inflows. Meanwhile, the Indian benchmark S&P Sensex today slumped by over 286 points while FIIs sold shares worth Rs 705 crore today as per provisional data with stock exchanges. The dollar index was down by about 0.20 per cent against a basket of six major currencies. "The rupee was seen depreciating against the dollar and crossed the key level of 60.00. Globally, dollar sustaining above 83.50, Euro sustaining below USD 1.30 and weakness in the global stock markets continued to pressurize the rupee," said Abhishek Goenka, Founder and CEO, India Forex Advisors.