Poll scare: Volatile Rupee plunges, makes partial gain

Showing huge volatility, the rupee nosedived 70 paise to 64.74 in early trade as panic rippled through after initial trends suggested that the ruling BJP was lagging behind in Gujarat.

The rupee on Monday recovered from its massive initial losses but ended still lower by 20 paise to 64.24 a dollar after the trends showed the BJP will form governments in Gujarat and Himachal Pradesh.

Showing huge volatility, the rupee nosedived 70 paise to 64.74 in early trade as panic rippled through after initial trends suggested that the ruling BJP was lagging behind in Gujarat. Though the domestic currency managed to recover a major chunk of the lost ground — 50 paise — against the dollar, the overall weak sentiment kept the rupee under continued pressure throughout the day. The rupee had gained 30 paise to close at a fresh three-month high on Friday.

The 800-point fall in the Sensex impacted the sentiment on the foreign exchange market. While the Sensex recovered more than the lost ground, the rupee failed to keep pace with the stocks. On the global front, the greenback dipped against a basket of major currencies on caution ahead of a vote in US Congress on tax reform, after the bill moved another step closer to ratification over the weekend. The dollar index, which measures the greenback’s value against a basket of six major currencies, was up at 93.21 in early trade.