New Delhi: The Indian rupee on Wednesday crashed below the 73 marks against the dollar for the first time ever on strong demand for the American currency from importers amid rising global oil prices and unabated capital outflows.
Rising crude oil price impacted forex market sentiment. Oil prices were firm on Wednesday on expectations of a tighter market once US sanctions start targeting Iran’s petroleum industry from next month, although a strong dollar and rising US crude supply curbed gains.
At the Interbank Foreign Exchange (forex) market, the domestic currency dropped 43 paise to 73.34 against the US dollar in the early trade.
The rupee opened lower at 73.26 and weakened further to quote at 73.34 a dollar against its previous closing of 72.91 Monday.
Foreign institutional investors (FIIs) sold shares net worth a net of Rs 1,842 crore Monday, provisional data showed.
Investors remained concerned over sustained foreign capital outflows and soaring crude oil prices that crossed the $85 per barrel.
The rupee Monday tumbled 43 paise to end at a two-week low of 72.91 against the US dollar on steady capital outflows.
Forex dealers said besides strong demand for the American currency from importers, concerns of fears of rising fiscal deficit and capital outflows mainly weighed on the domestic currency.
Forex market remained closed on Tuesday on account of Gandhi Jayanti.
Meanwhile, the BSE benchmark Sensex dropped by 137.62 points, or 0.38%, to 36,388.52 in opening trade on Wednesday.