Indian Rupee Hits All-Time Low, Falls 35 Paise to 83.48 Against US Dollar
The rupee saw a depreciation of 35 paise, reaching a historic low of 83.48 against the US dollar. This decline was influenced by the strengthening of the greenback against other currencies in international markets and the weakness of Asian currencies. Forex traders attributed this trend to foreign fund outflows, which added pressure on the local currency.
At the interbank foreign exchange market, the domestic currency commenced trading on a weaker note at 83.28 against the US dollar. Eventually, it concluded at a new low of 83.48 (provisional), marking a decline of 35 paise compared to the previous day's closing of 83.13. During the day's trading session, the rupee touched a minimum of 83.52 against the American currency.
The rupee had previously marked its lowest closing level of 83.40 on December 13, 2023. Anuj Choudhary, a Research Analyst at Sharekhan by BNP Paribas, attributed the strengthening of the US dollar to the weakening euro and pound. The euro declined following the Swiss National Bank's unexpected decision to reduce interest rates by 25 basis points to 1.5 percent, increasing the likelihood 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 percent. 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.
In the meantime, the dollar index, which measures the strength of the US dollar against a basket of six currencies, saw a 0.31 percent increase, reaching 104.32. Brent crude futures, the global oil benchmark, experienced a 0.05 percent decrease, settling at 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.
In the Indian stock market, the 30-share BSE Sensex concluded 190.75 points higher, up by 0.26 percent, closing at 72,831.94. Similarly, the broader NSE Nifty saw an increase of 84.80 points, or 0.39 percent, ending at 22,096.75. According to exchange data, Foreign Institutional Investors (FIIs) were net sellers in the capital market on Thursday, disposing of shares worth Rs 1,826.97 crore.