Rupee at record low of 73.58 vs Dollar

​Mumbai: The rupee on Thursday crashed to a historic low of 73.81 to the dollar due to the twin-impact of capital outflows triggered by surging US Treasury yields and crude oil prices racing to a four-year high. The domestic currency closed at a record low of 73.58, down by 24 paise or 0.33 per cent, marking its third straight session of losses. The rupee has lost 110 paise or 1.51 per cent in the three sessions since Monday largely due to strong demand dollar demand from oil importers amid firming oil prices and foreign capital outflows. 

The US dollar strengthened against global peers after economic data signalled a thriving US economy which drove Treasury yields to a seven-year high of 3.23 per cent - a level not seen since mid-2011. Emerging currencies including the rupee bore the brunt during the day as investors shifted funds from riskier assets to safe bets like the US dollar. The dollar strengthened against the Chinese yuan by 0.2 per cent to 6.9 in the offshore market and touched a fresh 20-year high against the Indonesian rupiah. South African rand, Mexican peso and Australian dollar also dropped up to 1.5 per cent.

"The fall in the rupee led to a sharp rise in government bond yields, due to increasing expectations that the RBI's monetary policy committee (MPC) could go for a bigger rate increase than expected on Friday," V K Sharma, Head PCG & Capital Markets Group HDFC Securities. The rupee opened on a weak note at 73.72 against the previous close of 73.34 per dollar. 

It slid to an all-time low of 73.81 per dollar due to rising crude prices and reports that the RBI "cannot afford" a special swap window for oil importers to meet the dollar demand. It finally settled at 73.58, it all-time closing low, with a loss of 24 paise. The FBIL set the reference rate at 73.7509 for the US dollar and 84.6257 for the euro.