Rupee Dips Near Record Low Amid Dollar Demand And Foreign Fund Outflows
Forex traders said the USD/INR pair is hovering around its all-time low level, weighed down by trade tensions and global uncertainties.
- Rupee fell 7 paise to 88.78 against US dollar.
- Dollar demand from importers weighed on rupee.
- Foreign fund outflows and US visa fees added pressure.
The rupee depreciated 7 paise to close at 88.78 (provisional) against the US dollar on Friday, near its all-time low level, on dollar demand from importers and persistent foreign fund outflows.
Forex traders said the USD/INR pair is hovering around its all-time low level, weighed down by trade tensions and global uncertainties.
Moreover, persistent foreign fund outflows and the ongoing US visa fee hike issue also dragged down the domestic unit.
At the interbank foreign exchange, the rupee opened at 88.68 against the US dollar and touched an intraday low of 88.85 and finally settled for the day at 88.78 (provisional), lower by 7 paise from its previous close.
On Wednesday, the rupee recovered 9 paise from its all-time closing low to settle at 88.71 against US dollar.
On Thursday, equity, forex, bullion and commodity markets were closed on account of Gandhi Jayanti and Dussehra.
On September 30, the rupee had fallen to an all-time low of 88.80 against the US dollar.
"We expect the rupee to strengthen amid broad weakness in the US dollar and weakness in global crude oil prices. However, importer demand for dollar may cap sharp upside," said Anuj Choudhary, Research Analyst Currency and commodities Mirae Asset ShareKhan.
Choudhary further noted that the US dollar may weaken amid lack of economic data from the US amid the government shutdown. USDINR spot price is expected to trade in a range of 88.40 to 89.
Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading at 97.78, lower by 0.06 per cent, amid US government shutdown.
Brent crude, the global oil benchmark, was trading 1.03 per cent higher at USD 64.77 per barrel in futures trade.
On the domestic equity market front, the Sensex climbed 223.86 points to settle at 81,207.17, while the Nifty settled up 57.95 points at 24,894.25.
Foreign institutional investors offloaded equities worth Rs 1,605.20 crore on a net basis on Wednesday, according to exchange data.
Meanwhile, the Reserve Bank of India (RBI) left its key interest rates unchanged on Wednesday, as it waited for greater clarity on the impact of US tariffs as well as playout of earlier rate cuts and recent tax reductions.
RBI Governor Sanjay Malhotra, however, signalled scope for easing in the coming months to support the economy from any possible hit from US tariffs.
(This report has been published as part of the auto-generated syndicate wire feed. Apart from the headline, no editing has been done in the copy by ABP Live.)
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