Rupee nosedives below 83/$ amid capital outflows

Mumbai: Continuing its downward spiral, the rupee on Wednesday hit a record low against the greenback. The home currency plunged 61 paise to decline below the 83-mark for the first time against the US dollar amid unabated foreign capital outflows and a strong dollar in the overseas markets.

Besides, rising crude prices in the international markets and risk-averse sentiment among investors weighed on the local currency, traders said.

At the interbank foreign exchange market, the local currency opened strong at 82.32 but later pared gains to settle at an all-time low of 83.02against the American currency, down 61 paise over its previous close. In the previous session on Tuesday, the rupee slipped 10 paise to end at 82.40 against the dollar.Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, advanced 0.31 per cent to 112.48.

The dollar's ascent has been triggered by inflation in the UK hitting a 40-year high level last month, owing to rising food prices. There are speculations that the Bank of England may hike interest rates sooner than expected to curb price rise.

Last week while commenting on the rupee's fall, Finance Minister Nirmala Sitharaman had said in Washington that she saw it as the US dollar strengthening rather than the rupee falling.

Global oil benchmark Brent crude futures rose 0.82 per cent to $90.77 per barrel. On the domestic equity market front, the 30-share BSE Sensex gained 146.59 points or 0.25 per cent to end at 59,107.19, while the broader NSE Nifty advanced 25.30 points or 0.14 per cent to 17,512.25.

Foreign Institutional Investors (FIIs) remained net sellers in the capital markets as they offloaded shares worth Rs 153.40 crore on Tuesday, according to exchange data.