Mumbai:(IANS) A massive sell-off in the Indian equity markets pushed the Indian rupee to a 23-month low of Rs.66.79 to a dollar during intra-day trade on the foreign exchange markets.

The rupee closed at the Rs.66.79-mark on the day when a barometer index of the Indian equity markets plunged by 1,624.51 points, or 5.94 percent — its steepest fall in terms of points.

“Rupee is following the equities fall. The sell-off in the global equities has impacted the rupee badly. If the sell-off continues, we might see rupee plunging further,” Hiren Sharma, senior vice president, currency advisory at Anand Rathi Financial Services, told IANS.

The major catalyst for the rupee’s fall has been the devaluation of yuan, intended to boost Chinese exports.

China’s central bank devalued yuan by two percent on August 11. This was the biggest devaluation of the Chinese currency since 1994.

The currency fell again by another two percent on August 12 panicking the world economy.

The measure to devalue the yuan is also seen as an attempt to arrest the implosion in the Chinese markets– whose benchmark index fell by over 8 percent on Monday, prompting fears of another round of yuan devaluation.

The yuan has fallen by 4.6 percent till now since August 11.

The world markets are fearful of the fact that the $10 trillion dollar Chinese economy has the ability to dump unlimited amounts of goods and services, thereby cornering the entire international exports customers base.

“The next move in the rupee will depend on the global situation and the Reserve Bank of India (RBI). A major part of the global cues will emanate out of China, as the Chinese government will take steps to arrest the fall in their markets,” Anindya Banerjee, senior manager for currency derivatives with Kotak Securities, told IANS.