The rupee posted its biggest single-day fall off 66 paise in 15 months on Monday as heightened fears over a likely Greek debt default triggered a flight to safe-haven dollar, while a slump in July’s IIP data also weighed. The rupee ended at 47.22/23 to a dollar, 1.5 per cent weaker on the day to post its biggest single day fall since June 1, 2010, after touching a low of 47.23, a level not seen since July 22, 2010.
Dealers said persisting demand for dollar from importers and banks in the wake of fresh signs of capital outflows weighed against the local currency. On top of this, foreign investors pulled out Rs 934 crore from Indian stocks on Monday. The dollar’s appreciation against euro triggered the rupee’s steep fall. Euro declined 0.4 per cent against the dollar at $1.3594 as investors feared that Greece would default on its debt and banks would be downgraded. In the Asian market, the euro — common currency for 17 European countries — lost 1.2 per cent to 104.66, a 10-year low against yen.
With global stock and currency markets witnessing a turmoil, the rupee opened weak and fell further to settle at 47.22/23.