Finance
The rupee fell 35 paise to end at an all-time low of 83.48 vs the US dollar on Friday, following the greenback’s surge against major crosses in international markets and weak Asian counterparts.
Forex dealers claimed that outflows of foreign funds affected the local currency as well.
The local currency depreciated 35 paise from the previous closing of 83.13 to a record low of 83.48 (provisional) at the interbank foreign exchange market, where it opened weakly versus the US dollar at 83.28.
In intraday trade, the rupee touched a low of 83.52 against the American currency.
The rupee had earlier recorded its lowest closing level of 83.40 on December 13, 2023.
According to Anuj Choudhary, Research Analyst, Sharekhan by BNP Paribas, the US dollar strengthened on weak euro and pound.
Euro declined as the Swiss National Bank (SNB) surprised the markets by cutting interest rates by 25 bps to 1.5 per cent, which raised the odds of a rate cut by the European Central Bank (ECB) in June 2024.
The pound also fell after the Bank of England kept interest rates unchanged at 5.25 per cent. Two hawkish committee members, who voted for a rate hike in the previous meeting, also voted for a no rate hike. Robust economic data from the US also favoured the US dollar, Choudhary said.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.31 per cent higher at 104.32 on Friday.
Brent crude futures, the global oil benchmark, declined 0.05 per cent to USD 85.74 per barrel.
“We expect the rupee to trade with a negative bias on the strong US dollar and expectations of a bounce back in crude oil prices. However, a positive tone in the domestic markets may support the rupee at lower levels. Any selling of dollars by the RBI may also support the rupee,” Choudhary added.
The 30-share BSE Sensex, which measures domestic equities market performance, ended the day at 72,831.94, up 190.75 points, or 0.26 percent. The NSE Nifty as a whole increased by 84.80 points, or 0.39 percent, to 22,096.75.
According to exchange data, Foreign Institutional Investors (FIIs) sold shares worth Rs 1,826.97 crore on Thursday, making them net sellers in the capital market.
Source:FE
