MUMBAI: The Indian rupee fell by 21 paise to a historic low of 84.30 against the US dollar on November 6, weighed down by a stronger dollar and sustained foreign fund outflows, according to forex traders.
The dollar index, which tracks the US currency against a basket of six others, jumped 1.34 per cent to 104.80 as markets reacted to Donald Trump’s likely victory in the US Presidential election.
At the interbank exchange, the rupee opened at 84.23 against the dollar, fluctuating between a high of 84.15 and a low of 84.31 during the session before settling at 84.30.
The rupee’s performance has been on a downward trajectory this calendar year due to rising US interest rates and a resilient dollar.
Trump factor
In addition to Trump’s electoral win, a US Federal Reserve rate cut is anticipated in a meeting later this week, with potential further easing of up to 100 basis points projected for 2025.
“The rupee is expected to remain under pressure, reflecting a strong dollar and foreign institutional investor (FII) outflows,” noted Anuj Choudhary, Research Analyst at Sharekhan by BNP Paribas. Choudhary added that the RBI’s intervention might stabilize the rupee if needed.
Meanwhile, domestic equity markets surged, with the BSE Sensex closing 901.5 points higher at 80,378.13 and the Nifty rising 270.75 points to 24,484.05.
Foreign investors, however, continued their sell-off, with net sales amounting to Rs 2,569.41 crore on Tuesday. On the economic front, India’s services PMI improved to 58.5 in October from 57.7 in September, driven by robust demand and strong sales growth, which bolstered employment opportunities across sectors.
This ongoing pressure on the rupee suggests that further volatility may be likely amid global market dynamics and domestic economic signals.
