Mumbai: The rupee Wednesday collapsed to a lifetime low of 68.85 against the dollar and closed at 68.80, registering its biggest single-day loss of 256 paise, as global oil prices jumped, deepening concerns about the current account deficit and capital outflows.

Consistent dollar demand from banks and importers, mainly oil refiners, following higher crude oil prices, kept the rupee under pressure.

At the interbank foreign exchange market, the rupee opened at 66.90 a dollar against 66.24 previously and dropped to 68.75 in late morning deals. It recovered some ground in the afternoon after the central bank was said to have intervened but dropped to an all-time intra-day low of 68.85 before ending at 68.80, a fall of 256 paise or 3.86 percent.

In three trading days in a row, the rupee has lost 560 paise, or 8.86 percent, against the dollar. So far in August, it has tanked by 840 paise, or about 14 percent, and in the current year by 1,381 paise or over 25 percent.

“There is a shortage of dollars in the market as participants are expecting the rupee to fall to 70-72 level,” said Naveen Raghuvanshi, associate vice-president at Development Credit Bank. “Even corporates are not willing to sell dollars at these levels. Whatever small supply of dollars is seen today, it is coming from the nationalised banks.”

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