Rupee crashes to eight-month low of 71.81/$

The rupee on Thursday plunged 26 paise to an over eight-month low of 71.81 against the US dollar as falling stocks and foreign fund outflows hit sentiment.

The fall was also precipitated by the volatility in the emerging market currencies due to drop in Chinese yuan.

At the interbank foreign exchange, the Indian currency opened weaker at 71.65 a dollar and went on to touch the day's lowest level at 71.97. It settled at 71.81, down 26 paise against the US unit. This was the lowest level for the rupee since December 14, when it had closed at 71.90.

On Wednesday, the Indian rupee had closed at 71.55 a dollar.

Bringing the rupee under more pressure, the global crude benchmark Brent Futures rose 0.75%to trade at $60.75 per barrel on Thursday.

The dollar index -- which gauges the greenback's strength against a basket of six currencies -- rose 0.02% to 98.31.

The 10-year Indian government bond yield was down at 6.56 per cent on Wednesday.

Meanwhile, foreign investors pulled out Rs 902.99 crore from Indian equities on Thursday, as per exchange data.

The dollar index edged higher today after minutes from the Federal Reserve's July meeting showed most policy makers viewed their interest-rate cut as part of a mid-cycle adjustment, while they remained confident in a sustained US economic expansion, he said.

The Financial Benchmark India Private Ltd set the reference rate for the rupee/dollar at 71.5508 and for rupee/euro at 79.3942. The reference rate for rupee/British pound was fixed at 86.8913 and for rupee/100 Japanese yen at 67.20.