Rupee hits 73.34/ dollar

Centre, RBI swing into action to slow down further fall

Mumbai, Oct. 3: The rupee on Wednesday plunged by 43 paise to breach the historic low of 73 level as soaring crude oil prices fuelled worries over capital outflows and widening current account deficit.

The domestic currency closed at a record low of 73.34, down by 43 paise or 0.59 per cent at the interbank foreign exchange here.

In the day trade, the rupee crashed to its alltime low of 73.42 per dollar as crude oil prices breached the $ 85 per barrel mark, leading to huge outflows of cash.

Investors remained concerned over sustained foreign capital outflows and soaring crude oil prices, analysts said.

After breaching the $ 85 per barrel level, the benchmark Brent crude stayed near four- year high levels at $ 84.86 per barrel.

According to the provisional exchange data, foreign investors withdrew ` 1,550 crore on a net basis from capital markets on Wednesday.

Rising US interest rates and bond yields have encouraged investors to pull out funds from emerging markets to pocket better returns, analysts said.

“The rupee has made a new record low today on the back of consistent rise in the crude oil prices. A sharp rise in crude oil along with steep depreciation in the rupee might push inflation higher in coming months,” Rushabh Maru - Research Analyst, Anand Rathi Shares and Stock Brokers.

The RBI refused to open a special window for oil marketing firms which affected market sentiments, V. K. Sharma, Head of private client group & capital market strategy at HDFC Securities.

Stocks also fell by more than 1.5 per cent due to the rupee falling to record low levels. The Sensex plunged by 550 points while the Nifty tanked 150 points.