Taking cues from US Federal Reserve chairman Janet Yellen's statement on interest rate hike, Indian rupee depreciated sharply to hit the 68 mark against dollar on Friday. Rupee, which had touched this figure in June 2016, fell as the dollar strengthened after Yellen made a strong case for hiking interest rates next month.
"Incoming economic data justified a rate hike relatively soon," Yellen told the Joint Economic Committee of Congress on Thursday. Appreciating dollar also pulled down a host of global currencies including euro and Japanese yen.
In the early morning trade, rupee opened lower by 18 paisa at 68 per dollar against the closing rate of 67.82 on Thursday and was hovering around 68.10 at 10.18 am.
US Fed's clear hint of raising interest rates in the December review is likely to put pressure on emerging market currencies in the coming days as analysts fear foreign institutional investors (FIIs) pulling out money from these markets.
In the equity market, BSE Sensex was trading flat with a marginal loss as US Fed's anticipated move coupled with concerns over dip in consumption demand in the near-term due to demonetisation weighed on investors' sentiments.
At 10.24 pm, while BSE Sensex was down 0.17 percent at 26,180.78, 50-share index Nifty was trading at 8,066.65, down 0.16 percent.
Hindalco (down 2.26 percent) was the top loser in the early morning trade followed by Bharti Infratel, Grasim, Tata Motors and Dr Reddy's Labs. Similarly, NTPC was the top gainer with 3.29 percent rise followed by Sun Pharma, ONGC, Eicher Motors and HCL tech.
Sectors like consumer durables, FMCG and metals were dragging the market, while oil and gas, public sector banks and healthcare were providing some support to the market.