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Rupee falls 14 paise against dollar in opening trade; US currency strengthens after China's central bank eases domestic policy

FP Staff
Forex dealers said the dollar's strength against major global currencies weighed on the rupee sentiment.

Mumbai: The rupee dropped by another 14 paise to 73.90 per dollar in early trade Monday as the US currency gained in global markets amid unabated foreign fund outflows.

The dollar strengthened after China's central bank eased its domestic policy to support the economy.

China's central bank said on Sunday that it was cutting the reserve requirement ratios (RRRs) by 1 percent from October 15 which will inject a net $109.2 billion in cash into the banking system, amid a deepening trade war with the US that has increased pressure on growth in the world's second-largest economy.

"An RRR cut is not enough to counter the impact of the trade war. The economy is quite weak, and I see a growing number of companies selling their assets," said David Dai, general manager of Shanghai Wisdom Investment Co Ltd, a hedge fund.

Forex dealers said the dollar's strength against major global currencies weighed on the rupee sentiment.

On Friday, the rupee had lost 18 paise to end at a record low of 73.76 after collapsing to a lifetime low of 74.23 (intra-day) after the RBI unexpectedly kept the policy rate unchanged.

Foreign investors have pulled out over Rs 9,300 crore ($1.3 billion) from the Indian capital markets in the last four trading sessions.

Meanwhile, the benchmark BSE Sensex continued to fall, losing another 67.72 points, or 0.20 percent, to 34,309.27 in early trade Monday.

--With PTI inputs

Also See: Rupee drops 29 paise to 72.49 against US dollar; reports of China cancelling trade talks with US weighs down currency

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