The rupee weakened towards 64 per dollar on Wednesday as it slipped to 63.88 against Tuesday's close of 63.53 in opening trade. The rupee last traded above the 64 per dollar mark in September 2013. Madan Sabnavis, chief economist at Care Ratings expects the rupee to hover between 64 and 65 a dollar in the coming days.
The weakness in the rupee has come in the wake of a global turmoil in stocks and currencies. Global risk assets have come under pressure after Russia's sharp increase in interest rates reinforced concerns about the global economy at a time when oil prices are sliding.
Global concerns have led foreign investors to pull out money from equities, putting pressure on the rupee. On Tuesday, FIIs sold cash shares worth Rs 1,247 crore, extending their selling streak to a sixth consecutive session.
Analysts and policymakers are not overly worried about the weakness in the rupee because India's domestic fundamentals continue to be strong and the country is widely seen as sturdier in the face of any sell-off in emerging markets compared with last year.
Foreign investors have purchased a net $43.4 billion in shares and bonds this year, allowing India to outperform most emerging markets.
On Tuesday, Trade Secretary Rajeev Kher said he was not too concerned about the rupee's falls to around 63 to the dollar, while a central bank official told Reuters "it is still not an alarming situation".
"India is certainly less vulnerable to the current crisis as compared to other emerging Asian economies," said Samir Lodha, managing director at QuantArt Market Solutions, citing factors such as easing inflation.
Source:profit.ndtv.com
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