The rupee plunges to a new record low of 68.75 per dollar in the late morning trade on persistent dollar demand from banks and importers due to further fall in equity market amid rise in crude oil prices.
The rupee resumed lower at 66.90 per dollar as against the last closing level of 66.24 per dollar at the Interbank Foreign Exchange (Forex) Market and dropped further to an all-time low of 68.75 per dollar at 1045 hrs.
Stock markets also fell sharply, with the 50-share Nifty benchmark trading below 5,150 levels having dropped around 170 points. The BSE Sensex dropped over 500 points
Persistent capital outflows by foreign funds also affected the rupee value against the dollar, a forex dealer said. Foreign Institutional Investors (FIIs) sold shares worth a net Rs 1,373.99 crore yesterday as per the provisional data from stock exchanges.
Oil prices rose in Asian trade today on concerns over possible US military action against Syria after Washington warned President Bashar al-Assad's regime that it would face action over an alleged chemical weapons attack. New York's main contract, West Texas Intermediate (WTI) for delivery in October, was up 57 cents to USD 106.49 in mid-morning trade.
Meanwhile, the benchmark Sensex tumbled by 457 pts or 2.54 % to 17,510.89 at 1035 hrs
Continuing its free-fall, the rupee on Wednesday breached 68-mark against the dollar by falling 176 paise to trade at a life-time low on strong demand for the US currency amid rising concerns over fiscal burden after the passage of the Food Bill.
At the Interbank Foreign Exchange (Forex) market, the local currency opened lower at 67.06 a dollar from its previous close of 66.24 and breached 67-mark to trade at a fresh low of 67.42, down by 118 paise, or almost 1.8 %.
Forex dealers said besides strong month-end demand for the American currency from importers, concerns related to subsidy burden after the passage of Food Security Bill and capital outflows mainly weighed on the domestic currency.
Further, rising crude prices in the global market also put pressure on the rupee, they said.
The rupee had recorded a steep fall of 194 paise, or 3.02 % to close at record low of 66.24 against the dollar in the previous session. Meanwhile, the BSE Sensex fell further by 229.66 points, or 1.28 %, to 17,738.42 points in early trade.
Global markets were also jittery after reports said that simmering tensions in Syria may affect geopolitical balance.