Mumbai, Dec 12 (PTI) The rupee depreciated by 5 paise to settle at an all-time low of 84.88 against the US dollar on Thursday, dragged down by negative domestic equity markets, outflow of foreign funds and rise in crude oil prices.
Forex traders said the rupee remains in a weakening mode due to dollar demand from importers and foreign banks.
At the interbank foreign exchange, the rupee opened at 84.85 and touched the lowest-ever level of 84.89 against the greenback during intra-day trade. The unit finally ended the session 5 paise down at a fresh all-time low closing level of 84.88 against the dollar.
On Wednesday, the rupee settled with a gain of 2 paise at 84.83 against the US dollar.
Rupee’s previous record low closing level was recorded on December 9, when it settled 20 paise lower at 84.86 against the dollar.
On the domestic macroeconomic front, retail inflation declined in November to 5.48 per cent and came within the Reserve Bank’s comfort zone mainly due to easing food prices, creating headroom for a rate cut at the central bank’s rate-setting panel meeting under new Governor Sanjay Malhotra in February.
India’s industrial production (IIP) growth slowed to 3.5 per cent year-on-year in October 2024, mainly due to poor performance of mining, power and manufacturing, as per official data released on Thursday.
Anuj Choudhary, Research Analyst at Mirae Asset Sharekhan, said the rupee touched a fresh all-time low on strong US dollar and weak domestic markets.
He further said the US dollar gained on rising inflation in the US. However, it was in line with estimates.
“Surge in global crude oil prices may further pressurise the rupee. However, any intervention by the RBI may support the rupee at lower levels. Traders may take cues from PPI (producer price index) and weekly unemployment claims data from the US. USD-INR spot price is expected to trade in a range of 84.65 to 85.10,” he said.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading higher by 0.09 per cent at 106.81.
Brent crude, the global oil benchmark, fell 0.63 per cent to USD 73.06 per barrel in futures trade.
Jateen Trivedi, VP Research Analyst – Commodity and Currency, LKP Securities, said the rupee continued to hover in a weak range as the US inflation data came in line with expectations, signaling potential continuity in the Federal Reserve’s rate-cut trajectory.
“… The dollar held its ground near the key 106 level, keeping pressure on the rupee. Additionally, FII selling resumed after a brief phase of buying, further contributing to rupee weakness,” he added.
On the domestic equity market front, the 30-share benchmark index Sensex closed lower by 236.18 points or 0.29 per cent at 81,289.96 points. The Nifty was down 93.10 points, or 0.38 per cent, to 24,548.70 points.
Foreign Institutional Investors (FIIs) were net sellers in the capital markets on Thursday, as they offloaded shares worth Rs 3,560.01 crore, according to exchange data. PTI HVA DRR DRR
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