Indian currency continues its downslide; tumbles by 108 paise

Mumbai: After taking a respite for a week, the Indian rupee continued its downslide and tumbled by 108 paise to end the truncated week at more-than four-month low of 61.18 against the Greenback on distinctly weak local equities amid fresh dollar demand from importers. The Forex market was closed on July 29 on account of "Ramzan Id".

Importers and some banks bought dollars and short-sellers covered their positions on hopes of further hike in the dollar value after the US Fed recently trimmed its monthly economic stimulus by USD 10 billion. The dollar too gained against most peers as the American economy grows stronger, impacting negatively on the rupee value. Fresh selling by Foreign Institutional Investors (FIIs) also put pressure on the rupee.

FIIs pulled out USD 277.78 million on first three trading sessions of the week, as per Sebi data. At the Interbank Foreign Exchange (Forex) market, the domestic unit commenced slightly weak at 60.12 a dollar from last last weekend's close of 60.10 and it touched a two-week high of 60.05 on Wednesday. However, later it met with strong resistance and fell sharply to breach 61-mark to over four-month low of 61.19 before settling the week at 61.18, a net fall of 108 paise — its worst drop since 112-paise plunge in the week ending January 24 — or 1.80 per cent. On the drop in markets, RBI Governor Raghuram Rajan in Delhi said: "We are not immune to what is happening world markets."