The rupee slipped to a new all-time low of Rs 102.45 against the British pound this afternoon, as the Indian currency ended its two-day recovery amid fresh concerns over foreign capital outflows and weak equity market.
After opening at around 100 level against the pound, the rupee lost further ground as the stock market snapped its three-day upward momentum and the dollar strengthened against other currencies.
By early afternoon, the rupee was trading at Rs 102.45 versus pound and had slipped below 65-level against the US dollar at the Interbank Foreign Exchange (Forex) market.
The rupee had first breached the 100-level against pound on August 20 and continued to trade below this level for three consecutive days before regaining some lost ground in the past two sessions (August 23 and August 26).
The rupee has depreciated by over 21 per cent against the pound in the past three months, from close to 83 in mid-May, while it was at about 80 in March.
Forex dealers said besides strong demand for the American currency from importers and banks, dollar’s strength against other currencies overseas amid expectation that the Federal Reserve will soon taper its bond-buying programme weighed on the domestic currency.
Continuing plunge in the equity market in view of sustained capital outflows by foreign funds is further adding pressure on the rupee.
Steps taken by the Reserve Bank and the Government to curb volatility in the exchange rate have had little effect so far.