Rupee declined to an all time low of 84.40 against the US dollar on Thursday, affected by continuous foreign fund withdrawals and robust dollar requirements from investors. According to currency market specialists, sustained inflation and substantial foreign capital outflows are primarily responsible for the downward movement in the USD/INR pair.
In early trade at the interbank foreign exchange market, the rupee commenced trading at 84.40 against the American currency, showing a depreciation of 1 paisa compared to its preceding closing value. It was around that with 84.4025 as at 11.00 am IST.
“The Reserve Bank of India (RBI) has been actively intervening to protect the rupee, selling dollars to stabilize the currency. However, this has led to a decrease in India’s forex reserves, which now stand at USD 682 billion, down from a peak of USD 704 billion,” said Amit Pabari, Managing Director of CR Forex Advisors. He indicated that the USD/INR is anticipated to fluctuate between 83.80 and 84.50, with a slight inclination towards the lower range.
The dollar index, which indicates the US currency’s value against six principal currencies, increased by 0.18% to 106.66. The international oil benchmark, Brent crude futures, decreased by 0.46% to USD 71.95 per barrel.
Internationally, Chinese economic support measures and anticipated additional fiscal assistance have created additional pressure on Indian assets. Furthermore, India’s rising inflation continues to affect the rupee negatively, with October’s retail inflation reaching 6.21%, the highest in 14 months, primarily attributed to increasing food costs.
The Indian stock markets showed modest gains, with Sensex increasing by 39.66 points to 77,730.61, and Nifty advancing by 15.55 points to 23,574.60. Foreign Institutional Investors (FIIs) remained net sellers, disposing of shares valued at Rs 2,502.58 crore.
The rupee’s weakening persists despite the Reserve Bank of India’s attempts to control excessive fluctuations. While the dollar continues its post-US election strengthening, the rupee has reached new lows, although its depreciation remains less severe than other Asian currencies, primarily due to RBI’s market interventions.
As the US dollar continues to strengthen and anticipation grows for potential Federal Reserve rate reductions, market participants are focusing on 84.50 as the next significant level for the rupee.
Trending
- Avaada Group to invest Rs 5,800 crore to develop 1200 MW pumped hydropower storage project in Rajasthan
- Now, SEBI investigating whether Adani Group flouted disclosure rules
- RBI’s war against inflation is not yet over, says governor Shaktikanta Das
- NTPC green energy’s $1.2 billion IPO fully sold on last day
- Stock market today: BSE Sensex rises over 200 points; Nifty50 above 23,400
- No respite! Adani Group stocks plunge up to 11% as Kenya cancels deals after US charges against Gautam Adani
- Uniqlo to boost sourcing from India for global markets
- JSW MG’s Windsor SUV pips Tata, Mahindra EVs
- Worst day since Hindenburg: M-cap crashes 2.2 lakh crore | India News
- Green arms scrap $600 million bond offer