MUMBAI: In its worst slide in about two months, the rupee on Friday weakened 76 paise to 62.69-also its lowest close in two months-following selloff in emerging market currencies over the US Fed tapering and weak China manufacturing data.
The last time the rupee closed at a level weaker than Friday's was at 62.87 on November 22, 2013. The currency selloff also took its toll on the stock market with the sensex closing 240 points lower at 21,134 as foreign funds turned net sellers.
Market players said that the US Fed's decision to slow down its $85 billion per month bond buying programme to $75 billion, popularly called tapering, from this month has prompted global investors to shift their funds to developed markets from emerging markets like India, China, Brazil, Turkey among others. This is because they feel the chances of making money in developed markets are now higher which, in turn, is making emerging markets riskier bets. And withdrawal of funds in emerging markets by FIIs is sure to put pressure on their currency, which is starting to play out now.
The last time the rupee closed at a level weaker than Friday's was at 62.87 on November 22, 2013. The currency selloff also took its toll on the stock market with the sensex closing 240 points lower at 21,134 as foreign funds turned net sellers.
Market players said that the US Fed's decision to slow down its $85 billion per month bond buying programme to $75 billion, popularly called tapering, from this month has prompted global investors to shift their funds to developed markets from emerging markets like India, China, Brazil, Turkey among others. This is because they feel the chances of making money in developed markets are now higher which, in turn, is making emerging markets riskier bets. And withdrawal of funds in emerging markets by FIIs is sure to put pressure on their currency, which is starting to play out now.
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