Rupee stays weak for 3rd straight session, falls 12 paise to hit new all-time low of 85.27 against US dollar
The rupee dropped to an all-time low of 85.2525 per US dollar, tracking a decline in most of its Asian peers.
Follow
The Indian rupee stayed weak for the third consecutive session, plunging by 12 paise to close at an unprecedented low of 85.27 (provisional) against the US dollar on Thursday. Mounting pressure from a robust American currency and escalating crude oil prices further battered the currency’s performance.
The rupee began the session at a frail 85.23 at the interbank foreign exchange market, eventually dipping to a historic intraday low of 85.28 before settling at its weakest-ever closing level. This marked another challenging day for the rupee, which had previously shed 4 paise on Tuesday and 9 paise on Monday.
Market closures on Wednesday due to Christmas did little to stem the downward spiral, as forex traders pointed to heightened month-end and year-end dollar demand from importers, coupled with concerns over aggressive import tariffs potentially being imposed by the Donald Trump administration.
Expert analysis on Rupee's Freefall
Anuj Choudhary, a Research Analyst at Mirae Asset Sharekhan, attributed the rupee’s decline to a confluence of factors, including the dollar's strength and US Treasury yields, which soared to seven-month highs.
“The rupee fell to a fresh all-time low on the back of a strong dollar and rising US Treasury yields,” Choudhary explained. “Additionally, the surge in crude oil prices, heightened dollar demand during the month-end/year-end, and FII outflows are adding to the rupee’s woes. However, any intervention by the RBI could offer support at lower levels.”
Choudhary added that traders would closely monitor the US weekly unemployment claims data, with the USD-INR spot price expected to oscillate between 85.10 and 85.45 in the near term.
Meanwhile, the dollar index, which measures the greenback's performance against six major currencies, remained elevated at 107.93, though it edged lower by 0.09%. Rising US Treasury yields, which reached 4.61%, coupled with concerns over delayed rate cuts by the Federal Reserve, continued to support the dollar’s dominance.
Brent crude, the global benchmark for oil prices, climbed by 0.56% to trade at $73.99 per barrel, further exacerbating concerns over India’s trade deficit and inflationary pressures.
In the domestic equity market, the BSE Sensex ended flat at 78,472.48 points, while the Nifty 50 managed a modest gain of 22.55 points, closing at 23,750.20 points.
Foreign Institutional Investors (FIIs) offloaded shares worth Rs 2,454.21 crore on Tuesday, as per exchange data.
subscribe to Asianet Newsable WhatsApp channel by clicking here.
