The rupee dropped by another 14 paise to 73.90 per dollar in early trade on Monday as the US currency gained in global markets amid unabated foreign fund outflows. The dollar strengthened after China’s central bank eased its domestic policy to support the economy.
China’s central bank said on Sunday that it was cutting the reserve requirement rations (RRRs) by 1 per cent from October 15 which will inject a net $109.2 billion in cash into the banking system, amid a deepening trade war with the US that has increased pressure on growth in the world’s second largest economy.
Forex dealers said the dollar’s strength against major global currencies weighed on the rupee sentiment.
On Friday, the rupee had lost 18 paise to end at record low of 73.76 after collapsing to a life-time low of 74.23 (intra-day) after the RBI unexpectedly kept the policy rate unchanged.
Foreign investors have pulled out over Rs 9,300 crore ($1.3 billion) from the Indian capital markets in the last four trading sessions.
Meanwhile, the benchmark BSE Sensex continued to fall, losing another 67.72 points, or 0.20 per cent, to 34,309.27 in early trade Monday.