Rupee takes a plunge after Indian Army's surgical strike across LoC

MUMBAI: Mounting tension between India and Pakistan sent the rupee on a tailspin on Thursday, after India claimed the Army conducted some surgical strikes on terror launch pads across the Line of Control (LoC) and inflicted significant casualties and heavy damages on the Pakistan side.

Even as stocks crashed, dragging the benchmark Sensex by about 500 points, the domestic currency plunged to 66.91 level against the greenback around midday.

The rupee had opened strong in the morning at 66.43 compared with the previous close of 66.46 on persistent selling of the US dollar by exporters and banks while the greenback's weakness against its overseas peers supported the rupee.

Data showed the domestic currency had slipped 44.50 paise to hit a day’s low of 66.91 against the greenback, before gaining some ground. Around 2.30 pm, the local unit was trading at 66.88, down 42 paise or 0.64 per cent against the dollar over the previous closing of 66.46.

The weakness in domestic currency intensified amid concerns that foreign investors, who have pumped in about Rs 50,000 crore into domestic stocks so far this year, may run for the exit door if the tensions were to rise further. 

The rupee had opened strong in the morning at 66.43 compared with the previous close of 66.46 on persistent selling of the US dollar by exporters and banks while the greenback's weakness against its overseas peers supported the rupee.