Rupee plunges below 68-mark over Karnataka elections

  |   India News

The rupee on Tuesday plunged below the 68-mark to 68.07 against the dollar for the first time since January 2017, as uncertainty over government formation in Karnataka hit the forex market sentiment. The money market also witnessed turbulence with the 10-year benchmark bond yield ending at a three-year high of 7.905 per cent, a level last seen on May 18, 2015, from its previous close of 7.825 per cent.

According to dealers, the rupee and bond prices fell after the latest round of counting in Karnataka election results showed the BJP will fall short of gaining a clear majority in Karnataka assembly election. Congress said it will extend support to the JD(S) in forming the next government in Karnataka.

The Indian currency, one of the worst performers in the current fiscal, closed at 68.07 against the dollar, a level last seen on January 24, 2017, down 0.86 per cent from its previous close of 67.52. Outflows from the equity and debt markets also contributed to the fall in the rupee. Foreign investors have pulled out around Rs 9000 crore from the equity market and Rs 21,000 crore from the debt market in April and May.

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