Forex: The rupee fell back sharply after a brief recovery

Forex: The rupee fell back sharply after a brief recovery and ended at more than two-year low of 66.88 against its US counterpart on the back of heavy demand for the greenback. Strong overseas sentiment and growing fears about the historic US interest rate hike in nearly a decade remained firmly focused on the currency market.

A massive sell-off in equities and sustained capital outflows further compounded investor nervousness amid crashing crude oil prices in the face of global demand slowdown. The local currency has lost 19 paise, or 0.28 per cent, during the week.

The domestic unit resumed a tad weak at 66.70 per dollar as compared to last weekend's level of 66.69 at the Interbank Foreign Exchange market on mild demand for the American currency. Later, it made a resounding recovery to touch a high of 66.56 following bouts of dollar selling as well as firm local equities.

However, the rupee took a dramatic turn towards fag-end and plummeted sharply to hit a fresh two-year low of 66.92 -- a level not seen since September 4, 2013 -- due to frantic demand for the greenback from state-owned banks and importers before closing the week at 66.88, showing a loss of 19 paise, or 0.28 per cent. It had gained seven paise last week after an uninterrupted seven week downfall. 

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