Indian rupee nears 69-level against US dollar, logs biggest single day fall

Carnage on the forex market continued for the third straight day on Wednesday as the Indian rupee broke its previous low yet again, registering its biggest single day loss of 256 paise to close at a new historic low of 68.80 against the US dollar.

Global factors like worries over the possibility of military action against Syria, which pushed up global oil prices higher; and rise in the dollar's value overseas on likely tapering off bonds buying programme by the US Federal Reserve from next month, put pressure on the rupee.

However, domestic issues like increased capital outflows and fears over passage of Food Security Bill that weighed initially on the market sentiment, also worsened the rupee's chances of recovery on Wednesday.

Consistent dollar demand from banks and importers, mainly oil refiners, following higher crude oil prices, further kept the rupee under stress.

At the Interbank Foreign Exchange (Forex) market, the rupee opened sharply lower at 66.90 per dollar against last closing of 66.24 and dropped to 68.75 in late morning deals.

It later tried to recover in afternoon deals on suspected intrusion by the Reserve Bank of India but failed and again dropped to an all-time intra-day low of 68.85 before settling at 68.80, showing a massive fall of 256 paise, or 3.86 per cent.

In three trading days in a row, it has plunged 560 paise or 8.86 per cent. In the current month, till August 28, the rupee has tanked by 840 paise, or 12.21 per cent, and in the current year by 1,381 paise or 20.07 per cent.

The Indian benchmark Sensex, which was down by 519 points in late morning deals, recovered and closed 28 points, or 0.16 per cent, higher. The recovery was only due to hectic short-coverings ahead of expiry of August contract on Thursday, otherwise the sentiment remained sluggish.

With PTI inputs