The Indian rupee remained under intense selling pressure and witnessed a free fall for the fourth straight week, plunging to hit a fresh life-time low against the US dollar before managing a small recovery.
Overall, the forex mood broadly undermined on the back of increasing impact of geopolitical threats and concerns on macro-economic front.
The Government's confidence building measures to curb the currency volatility also fell short of many investors' expectations, causing heavy sell-off and the local stocks to take a massive plunge.
Trading in an extremely volatile market environment, the bruised rupee ended at 72.20, showing a steep loss of 36 paise.
Panic dollar demand from importers and speculative traders sent the home currency sinking to a historic low of 72.99.
It lost a whopping 229 paise in its four-consecutive weekly slide. Although, the domestic currency managed regain some lost ground, trimming its weekly decline.
The crash came despite the governments recent announcement of a slew of measures to attract more foreign fund inflows into the country.
The Asia's third-largest economy - India is facing severe macro challenges and goldilocks economic conditions are now changing fast.
A sharp spike in international crude oil prices weighed on the trading front towards the tail-end session even as the US dollar fell to seven-week lows after Donald Trump announced fresh 10 per cent tariffs on Chinese imports
The stubbornly high global crude oil prices are opening up a can of worms to heightened inflation risks and likely to disrupt government's fiscal maths along with deteriorating global financial conditions.
Considering that India is a net importer of crude oil, the impact of this imported inflation is expected to be significant.
The upcoming week will bring a Fed's monetary policy meeting, with rates expected to be rising by 25 bps.The benchmark 10-year sovereign yield, however fell by 5bps to 8.08 per cent from 8.13 per cent.
In the meantime, crude prices pared gains, following a report that OPEC and its allies are considering a coordinated increase in crude production.
The OPEC meeting with allies in Algiers is expected to focus on production gains as Iranian sanctions and depletion rates in Venezuela look to force the hand of OPEC.
Benchmark brent crude futures settled at $ 78.80 a barrel for the week.
Meanmwhile, India's foreign exchange reserves rose by $ 1.207 billion to $ 400.489 billion in the week to September 14 on account of increase in foreign currency assets, according to RBI data. In the previous week, forex reserves had declined by $ 819.5 million to USD 399.282 billion.
Foreign investors and funds pulled out a massive Rs 9,400 crore ($ 1.3 billion) from the capital markets in September so far, on widening current account deficit due to a surge in oil prices and depreciating rupee.
The latest outflow comes following a net infusion of close to Rs 5,200 crore in the capital markets, both equity and debt, last month and Rs 2,300 crore in August.
Fitch Ratings has upwardly revised its forecast for India's economic growth to 7.8 per cent from 7.4 per cent for the current fiscal.
Backtracking a brief weekend recovery trend, the rupee opened with a sharp 66 paise fall to 72.50 against the US dollar at the inter-bank foreign exchange (forex) market.
It quickly extended losses due to heavy speculative sell-off and crashed to hit an all-time low of 72.99, forcing RBI intervention in the currency market and restricting the local unit from breaching the 73-mark.
Anyway, the domestic unit recovered some ground and extended to subsequent trading breakouts.
