The rupee on Friday plunged to a new all-time low of 54.89 against the US dollar as capital outflows continued, raising widespread concerns about the health of the economy.
Forex dealers attributed the fall to strong capital outflows in tune with the fall in local as well as global stocks where investors are increasingly avoiding riskier assets and moving to the new safe haven – the US dollar.
Strengthening of dollar against the euro, which plunged to a four-month low following renewed worries over deepening eurozone debt crisis, also put pressure on the rupee.
The dollar continued to rise in Hong Kong market in the early trade, extending its longest rally since at least 1985, as raging fears about the eurozone’s troubles and deep losses in Asian equities lured investors into currencies believed to be safer.
At the Interbank Foreign Exchange, the domestic unit resumed lower at 54.60 per dollar against the last closing level of 54.47 and dropped to 54.82, before trading at fresh all-time low to 54.89.
Unless Euro strengthens against dollar with credible solution of Eurozone problems, especially Greece, rupee is less likely to appreciate, experts said.
With PTI Inputs