InvestorQ : Why did the rupee fall so sharply against the dollar on Tuesday 07 September?
Rutuja Nigam made post

Why did the rupee fall so sharply against the dollar on Tuesday 07 September?

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3 months ago
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After strengthening gradually from Rs.75/$ to Rs.73/$, the rupee weakened sharply to Rs.73.42/$ on Tuesday 07th September. This was on the back of aggressive dollar buying by importers and banks to meet dollar outflow demand. In addition, the Bloomberg Dollar Index or DXY or strengthened against the basket of hard currencies on the hope that the liquidity taper, if not interest rate hike, would serve to strengthen the dollar.

On Tuesday, the rupee fell by over 32 paisa to close at Rs.73.42/$. It was not just the Indian rupee, but most of the Asian currencies were weak against the US dollar. Experts also believe that the risks could be capped due to exporters selling dollars at Rs.73.70/$. Foreign portfolio investors sold equities on Monday and Tuesday of over $750 million and that has also added to pressure on the rupee dollar rate.

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