Rupee hits record low, drops 28 paise against US Dollar

Rupee hit a record low in late afternoon trade on Tuesday. It dropped 28 paise at 72.73 against the US Dollar as BSE Benchmark Sensex plunged over 500 points and NIfty traded below 11,300, according to market sources.

Traders attibute the fall in the Rupee to strengthening US Dollar as crude oil prices rose above $78 a barrel mark. Continued foreign fund outflows, sharp plunge in domestic equities with the benchmark Sensex crashing by over 500 points, too, weighed on the domestic unit, the dealers said.

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In the morning trade, Rupee opened on a positive note with a gain of 15 paise against Dollar to hit a historic low mid morning. The Rupee, however, failed to sustain strength and weakened to hit a fresh lifetime low of 72.73, down by 28 paise over its previous closing of 72.45. It breached its previous record low (intra-day) of 72.67 hit Monday.

There were no signs of change in trading preference of foreign portfolio investors who sold shares worth a net of Rs 841.68 crore. Domestic institutional investors (DIIs) also offloaded equities worth a net of Rs 289.66 crore Monday, according to provision data. Meanwhile, the BSE Sensex plunged 509.04 points, or 1.34 per cent, to close at 37,413.13 in Tuesday's session.

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Meanwhile, former Reserve Bank Governor Raghuram Rajan expressed hoped that the rupee will not go in for a free fall as the central bank is appropriately raising interest rate to control inflation.

Heavy speculative dollar demand along with panic among importers sent the domestic currency tumbling by a sharp 94 paise to hit a historic low of 72.67 in mid-morning trade, triggering the central bank intervention to defend the currency.

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(With Inputs from agencies)