Mumbai: The rupee on Thursday plummeted to 10-month low of 62.33 versus the greenback, down 31 paise, on strong dollar demand due to oil firms stepping up purchases of crude oil trading near 5-year lows and a weak trend in shares.
Logging its fourth consecutive session of decline, the local currency has now shed 56 paise against the US dollar. Concerns related to capital outflows and a strong dollar in overseas markets against peers like Yen too weighed on the rupee, a forex dealer said.
At the Interbank Foreign Exchange (Forex) market, the domestic currency resumed lower at 62.15 a dollar from last close of 62.02 and immediately the day's high of 62.12.
However, weakness in local equities throughout the day put pressure on the rupee. The currency gradually declined to a low of 62.3575 before ending at 62.33, a fall of 31 paise.
This is the currency's weakest close since February, 2014. In terms of single-session drop, today's 31-paise slide is its biggest fall against the dollar since October 16, when it had slumped by 42 paise.
"Dollar got a lift against the Indian Rupee as unwinding of the Yen and Euro carry trades triggered a sell-off in the domestic equity markets. The sell-off global equity market has spilled over into Indian shores as well. As a result, we have seen buying of US Dollars...over the past two session. There was demand noted from a few PSUs," said Anindya Banerjee, Currency Analyst, Kotak Securities.
After taking a respite for a day, the Indian benchmark S&P BSE Sensex today tumbled by 229.09 points or 0.82 percent. Foreign Portfolio Investors pulled out USD 6.92 million yesterday, as per Sebi data.
The dollar index was up by 0.06 per cent against its six major global rivals.
Pramit Brahmbhatt, Veracity Group CEO said, "Indian Rupee depreciated by half percent, taking cues from dollar index which is trading multi-year highs. Also, the dollar demand from oil companies dented the rupee movement further. There is caution ahead of consumer price inflation data due tomorrow."
Trading range for the spot US dollar/INR pair is expected to be within 62.00 to 62.70, he added.
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