MUMBAI: The rupee declined 8 paise to close at an all-time low of 84.50 (provisional) against the US dollar on Thursday, weighed down by a sharp sell-off in domestic equities and surging crude oil prices amidst geopolitical tensions.
Forex traders attributed the rupee’s decline to the dollar’s safe-haven appeal as tensions escalated between Russia and Ukraine, alongside sustained foreign fund outflows.
At the interbank foreign exchange market, the rupee opened at 84.41 before touching an all-time intra-day low of 84.51. It ultimately closed at 84.50, breaching the previous record low of 84.46 set on November 14. On Tuesday, the rupee had settled flat at 84.42. Markets were closed on Wednesday due to assembly elections in Maharashtra.
Rupee faces pressure
Jateen Trivedi, Vice President of Research at LKP Securities, noted that the rupee faced pressure as the dollar climbed above 106.65, driven by heightened global risk aversion amid geopolitical uncertainties.
“The sell-off in Indian equities, exacerbated by fraud and bribery charges against the Adani Group in the US, has intensified FII outflows, further pressuring the rupee,” he said.
Trivedi expects the rupee to trade within a range of 84.35 to 84.65 in the near term, with further depreciation likely.
Meanwhile, the dollar index, which measures the greenback’s performance against six major currencies, edged up 0.04 per cent to 106.66. Brent crude, the global oil benchmark, surged 1.35 per cent to $73.93 per barrel.
In domestic equity markets, the BSE Sensex dropped 422.59 points (0.54 per cent) to close at 77,155.79, while the NSE Nifty declined 168.60 points (0.72 per cent) to settle at 23,349.90. Foreign Institutional Investors (FIIs) offloaded shares worth Rs3,411.73 crore on Tuesday, according to exchange data.
