Published On : Wed, Aug 28th, 2013

Rupee sinks below 68 mark; People in Nagpur concerned over fiscal burden for food bill

Nagpur News: Rupee met with another big time crash on Wednesday, a day after Food Security Bill was passed in parliament. As the share market opened on Wednesday, the rupee breached the alarming 68 mark against dollar driving the sentiments back home in Nagpur towards further tax burden. In the early trade sensex tumbled down by 300 points. At one point in the day’s initial trading the rupee sunk to as low as 68.7 level to a dollar.

Most people in Nagpur are worried over the sinking rupee owing to the additional fiscal burden due to food bill. Analysts in the city believe that extra burden to the exchequer would probably means rise in their taxes.

Stocks of banking, oil and gas, PSUs, realty, FMCG, auto and capital goods sectors were major losers, dragging down the benchmark sensex.

Brokers in Nagpur said sustained selling by funds and other participants triggered by sliding rupee which breached 68 to a dollar and a weakening trend on the other Asian bourses, tracking overnight losses on the US market as the West stepped up preparations for a military strike on Syria, mainly dampened the trading sentiment here.

The wide-based National Stock Exchange index Nifty was also down almost 100 points.

At the Interbank Foreign Exchange (Forex) market, the local currency opened lower at 67.06 a dollar from its previous close of 66.24 and breached 67-mark to trade at a fresh low of 67.42, down by 118 paise, or almost 1.8 per cent.

It later breached the 68 mark.

Forex dealers said besides strong month-end demand for the American currency from importers, concerns related to subsidy burden after the passage of Food Security Bill and capital outflows mainly weighed on the domestic currency.

Further, rising crude prices in the global market also put pressure on the rupee, they said.

The rupee had recorded a steep fall of 194 paise, or 3.02 per cent to close at record low of 66.24 against the dollar in the previous session.