Indian rupee hits two-year low

Hitting a two-year low, the Indian rupee has continued to tumble. Amid continued selling by foreign institutional investors in domestic stock and debt markets, the rupee slipped over 0.4 per cent around 32 paise at its day low to 66.88 per dollar, a level last seen in September 2013, when India was facing a current account deficit crisis.

The rupee took a hit along with its Asian peers due to the persistent sentiment of risk on the back of a strengthening dollar. The dollar held on to an eight- and- a- half month peak on November 27, while the euro hovered around seven-month lows on expectations of additional stimulus from the European Central Bank next week.

Selloffs by foreign investors comes in the wake of a possible hike in interest rates by the US Federal Reserve next month. With the Federal Reserve likely to raise rates for the first time in nearly a decade, it has led foreign investors to exit emerging markets like India for the safety of US bonds, traders said.

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