RUPEE DIPS TO 73.58 AGAINST U.S. DOLLAR

Mumbai, Oct. 4: The rupee crashed to a new historic low of 73.81 to the dollar due to the twin-impact of capital outflows triggered by surging US Treasury yields and crude oil prices racing to a fouryear high.

The domestic currency closed at a record low of 73.58, down by 24 paise or 0.33 per cent, marking its third straight session of losses. The rupee has lost 110 paise or 1.51 per cent in the three sessions since Monday largely due to strong demand of dollars from oil importers amid firming crude prices and foreign capital outflows.

The dollar strengthened against global peers after economic data signalled a thriving US economy which drove Treasury yields to a seven-year high of 3.23 per cent — a level not seen since mid-2011.

Hawkish comments about the US economy by Federal Reserve chairman Jerome Powell have also boosted the dollar buying.

Emerging currencies including the rupee bore the brunt during the day as investors shifted funds from riskier assets to safe bets like the US dollar.

The dollar strengthened against the yuan by 0.2 per cent to 6.9 in the offshore market and touched a fresh 20-year high against the Indonesian rupiah.

South African rand, Mexican peso and Australian dollar also dropped up to 1.5 per cent. Brent crude also breached the four-year high of $86 dollar per barrel level, fuelling worries over widening current account and trade deficit. Oil prices have reached four-year peaks as the market focused on upcoming US sanctions on Iran. — PTI