Finance
The rupee sank 5 paise to an all-time low of 84.37 against the US dollar in early trade on Friday, driven down by ongoing foreign money outflows and a lackluster trend in domestic stocks.
Forex dealers believe the US Federal Reserve’s latest decision to lower interest rates represents a shift in the global financial landscape. Furthermore, with Donald Trump’s tax and trade policies influencing global markets, volatility could return to the rupee’s trajectory.
At the interbank foreign exchange, the rupee began at 84.32 versus the US dollar, then plummeted to an all-time low of 84.37, up 5 paise from the previous close.
On Thursday, the rupee slipped 1 paisa to close at a fresh lifetime low of 84.32 against the US dollar.
“The spotlight will now be on the Reserve Bank of India (RBI) and how effectively it navigates this shifting currency landscape. In such a dynamic environment, only those who adapt swiftly will thrive in the market ahead,” CR Forex Advisors Managing Director Amit Pabari said.
In its most recent monetary policy announcement, the US Fed cut its benchmark rate by 0.25 basis points to a target range of 4.5 percent-4.75 percent.
In its accompanying statement, the Fed struck a neutral-to-dovish tone, citing balanced risks to inflation and employment.
Meanwhile, the dollar index, which measures the greenback’s strength against a basket of six currencies, was trading 0.02 percent higher at 104.53.
Brent crude, the global oil benchmark, lost 0.65% to USD 75.14 a barrel in futures trading.
“In this dynamic environment, volatility in the USD/INR pair is expected, with the RBI likely maintaining a range between 83.80 and 84.50. If the dollar’s momentum stalls amid future Fed rate cuts and weakening investor confidence, the rupee could gradually strengthen toward the lower end of this range,” Pabari said.
On the domestic equity market front, Sensex declined 14.23 points, or 0.02 per cent, to 79,527.56 points. The Nifty fell 15.45 points, or 0.06 per cent, to 24,183.90 points.
Foreign institutional investors (FIIs) were net sellers in the capital markets on Thursday, selling shares worth Rs 4,888.77 crore, according to exchange data.
Source: IE
