The rupee depreciated by 68 paise to hit a three-month low of 64.88 (intra-day) due to growing concerns over an alleged fraud at Punjab National Bank.

Increased demand for the greenback from importers and banks also weighed on the rupee sentiment.

According to a forex dealer, a strong dollar also weighed on the Indian rupee. The dollar recovered from a 15-month low against the yen to trade at 106.75, up 0.15 per cent for the day.

The domestic unit hovered in a range of 64.88 and 64.41 before quoting at 64.81, down 60 paise at 4.40 pm local time.

Rating downgrade

“Punjab National Bank will need to provide for at least a substantial portion of the exposure. As a result, the bank's profitability will likely come under pressure,” rating agency Moody’s said as it put it on a downgrade warning.

Shares of Punjab National Bank fell nearly 5 per cent today, continuing the downtrend for the fifth straight session following the Rs 11,300-crore fraud.

The stock opened on a weak note and further lost 4.63 per cent to Rs 111 -- its 52-week low -- on the BSE.

In five trading sessions, the stock has declined over 31 per cent and suffered an erosion of Rs 11,581.56 crore in its market capitalisation.

On Friday, the rupee had ended 30 paise lower at 64.21 against the US dollar due to rising global crude prices and worsening trade deficit. On a net basis, foreign investors withdrew Rs 895.79 crore from stocks yesterday, according to provisional FPI data.

Meanwhile, the benchmark BSE index closed down by 71.07 points or 0.21 per cent at 33,703.59 and the broader NSE index ended lower by 18 points or 0.17 per cent at 10,360.40.

Related Topics
comment COMMENT NOW