Rupee slumps 31 paise to close at 96.25 against US dollar

MUMBAI: The rupee slumped below the psychologically important 96 per dollar mark on Thursday to close at 96.25 against the US dollar, the lowest level in more than two months, on risk aversion in global markets amid surging global bond yields and selling pressure from foreign investors.

Forex traders said the rupee is expected to trade with a negative bias amid risk aversion in global markets and worries over rising global treasury yields.

At the interbank foreign exchange market, the rupee opened at 95.95, then lost ground to touch an intraday low of 96.34 against the American currency. At the end of Thursday's trading session, the domestic unit was quoted at 96.25 against the greenback, lower by 31 paise over its previous close.

On Wednesday, the rupee pared gains to settle flat at 95.94 against the US dollar.

"We expect the rupee to trade with a negative bias on risk aversion in global markets and worries over rising global treasury yields. A strong dollar and surge in global crude oil prices may further pressurise the rupee," said Anuj Choudhary, Research Analyst, Mirae Asset Sharekhan.

Choudhary further noted that uncertainty over the US-Iran deal may also pressurise the rupee. However, any intervention by the RBI may support the rupee at lower levels.

Meanwhile, the dollar index, which gauges the strength of the greenback against a basket of six currencies, was trading at 101.90, higher by 0.45 per cent.

Brent crude, the global oil benchmark, was trading higher by 2.54 per cent at USD 100.52 per barrel in futures trade.

On the domestic equity market front, Sensex dropped 570.59 points to settle at 71,909.70, while the Nifty tanked 198.50 points to 22,421.95.

Foreign Institutional Investors (FIIs) offloaded equities worth Rs 9,484.22 crore on a net basis on Thursday, according to exchange data.

According to the latest government data released on Thursday, gross GST collections rose 14.7 per cent in September to over Rs 2.03 lakh crore, aided by domestic consumption and strong growth in revenues from imports.

A finance ministry report on Thursday said the Indian economy is estimated to have grown at 7.3 per cent in the September quarter of the current fiscal year, though at a slower pace than the 7.8 per cent growth clocked in the June quarter.

The September edition of the Monthly Economic Review report said the economy began FY27 on a firm footing, even as the global environment grew more uncertain.