The rupee plunged by 62 paise to a fresh 16-month low of 68.13against the dollar due to strengthening of the dollar against other currencies overseas.

Forex dealers said the dollar strengthened against major global currencies today, having pulled up from its lowest level in more than a week as hopes for easing global trade tensions pushed US bond yields higher.

Losses in domestic stock markets and demand for the US currency from importers also weighed on the local unit, they added.

The domestic unit opened down by 17 paise at 67.68 at the interbank foreign exchange market today. It hovered in a range of 68.13 and 67.45 before ending at 68.10, down 59 paise at 5 pm local time.

The rupee recovered sharply earlier in the day on suspected intervention by the central bank after falling to a near 16-month low.

State-run banks were seen selling dollars around 67.67 level, dealers said. The Reserve Bank of India typically intervenes in the foreign exchange market via state banks. The central bank likely sold dollars via state banks at 67.67 level to stem the rupee fall, they said.

“This time the intervention from RBI seemed quite decisive,” said a dealer at a foreign bank.

Yesterday, the rupee had lost 18 paise to end at a fresh 16-month low of 67.51 against the US currency on heavy dollar purchases and sustained fund outflows from equities.

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