The rupee on Tuesday logged its worst day since February 3, falling 0.57% in a single day against the dollar as expiry of the Reserve Bank of India's positions in the non-deliverable forwards (NDF) segment increased demand for the greenback.
The Indian currency was among the worst performers among Asian currencies as it closed at 87.21/$1 against the previous close of 86.70/$1 even as intervention by the central bank helped contain excess losses, traders said.
The RBI had taken forward dollar positions in the NDF market, which expired on Tuesday, increasing dollar demand in the market, traders said.
"The currency was under pressure throughout the day as markets bought RBIs positions which expired," said Anil Bhansali, head of treasury at Finrex Treasury Advisors. "There was also month-end dollar demand, plus there was selling by foreign portfolio investors from Indian equities," he said.
The RBI intervened by selling dollars as the rupee touched a low of 87.24/$1, traders said.
Foreign investors sold stocks worth ₹3,529 crore on Tuesday from Indian markets, BSE data showed. So far in February, FPIs have sold ₹30,390 crore, according to depository data.
"Major selloff happened after 12:30, where the rupee weakened dramatically in a short span of time," said Dilip Parmar, currency analyst at HDFC Securities.
Among Asian currencies, the Indian rupee was the second worst performer after the Thai baht, which declined 0.6% during the day, Bloomberg data showed.
Source Name : Economic Times