Rupee drops to lowest level since Aug 2013, trades 26 paise down at 68.82 against US dollar

The Indian rupee recorded losses for the fifth consecutive day on Thursday and traded 26 paise down at 68.82 against the US dollar, its lowest level since August 2013. 

According to report in Economic Times, sentiments turned extremely weak in the forex market due to consistent selling by foreign investors in the backdrop of demonetisation and renewed fears of a Fed rate hike. 

The currency opened nearly 22 paise down at 68.78 against the dollar on account of buying of the American currency by banks and importers.
Anindya Banerjee, Associate Vice-president for currency derivatives at Kotak Securities, said: "FPI flows have turned negative since the US election.

Rising US bond yields and a strong dollar are major headwinds for an emerging market currency like the rupee. At the same time, falling interest rate differentials post demonetisation and concerns over growth are adding pressure on the local currency. The 68-69 range is seen on spot." 

Since demonetisation, the rupee has plunged over 2.5 per cent till date. The Reserve Bank of India on Wednesday fixed the reference rate for the rupee at 68.47 against the US dollar and at 72.7844 for the euro. 

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