The rupee fell by 35 paise to hit an all-time low of 83.48 against the American currency on Friday, tracking a surging dollar against major currencies.
Forex traders said foreign fund outflows and higher US bond yields also weighed on the Indian unit.
The rupee opened weak at 83.28 against the greenback, and finally settled at a record low of 83.48, registering a fall of 35 paise from the previous close of 83.13. In intraday trade, the rupee touched a low of 83.52 against the dollar. The rupee had earlier recorded its lowest closing level of 83.40 on December 13, 2023.
According to Hitesh Jain, Strategist Yes Securities India, stronger Dollar Index and sharp fall in Chinese Yuan are weighing on emerging market currencies, with Indian rupee bearing the brunt. “Nevertheless, we saw the rupee rebounding from the record lows as the RBI is seen intervening at these levels. Moreover, strong foreign capital inflows and lowering current account deficit remains supportive of the currency.”
The rupee dropped to its lowest level in three months amid the rise in the US dollar and higher US Treasury bond yields. “The dollar index witnessed very high volatility and recovered from their lows after better-than-expected US existing home sales data. Despite strong gains in the domestic equity markets and profit taking in global crude oil, the rupee witnessed a drastic fall,” said Rahul Kalantri, vice president of Commodities, Mehta Equities Ltd.
“We expect the rupee to remain volatile next week and the pair could trade in the range of 83.10-83.70,” he said.
The 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. Robust economic data from the US also favoured the US dollar.
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 $ 85.74 per barrel. Brent crude futures, the global oil benchmark, declined 0.05 per cent to $ 85.74 per barrel.
© The Indian Express Pvt Ltd
First uploaded on: 23-03-2024 at 01:03 IST
