Re dives 44 p to close at 20-mth low against US$

Mumbai, December 15

The rupee plunged by 44 paise to close at a 20-month low on Wednesday as consistent foreign fund outflows and risk-averse sentiments weighed on the local unit.

Growing concerns over the Omicron variant of coronavirus after the WHO warned of high transmissibility risks of the new strain hit the appeal of riskier assets.

The rupee has been under pressure for the past five weeks due to consistent forex outflows. The local unit has declined in nine out of 11 trading sessions this month, tanking a total 119 paise or 1.58% against the dollar.

Plunges to 76.32

• The rupee has been under pressure for the past five weeks due to consistent forex outflows on expectations of faster rate of tapering by the US Federal Reserve to rein in rising inflation
• The domestic currency has declined in nine out of 11 trading sessions this month, tanking a total 119 paise or 1.58% against the dollar
• At the forex market, it breached the 76-level in opening session to trade lower at 76.05 a dollar on foreign fund outflows before plunging further to 76.32

At the interbank foreign exchange market, the rupee breached the 76-level in opening session to trade lower at 76.05 a dollar on foreign fund outflows.

The rupee plunged further to settle at 76.32, a level not seen since April 24, 2020, showing a loss of 44 paise over the previous close. Also, the rupee recorded its sharpest single-day decline in nearly eight months.

Traders said the decline in the rupee has also been driven by the fear of the rapid spread of the Omicron variant.

“Rupee depreciated further and fell below 76-level today following dollar demand and risk-averse sentiments. So far this month, nine out of 11 trading sessions, rupee depreciated following policy divergence between RBI and US Fed, along with foreign fund outflows from domestic equities,” Dilip Parmar, Research Analyst, HDFC Securities, said. — PTI