New Delhi: The Indian rupee closed at a lifetime low against the US dollar on Monday (October 16) due to a surge in crude oil prices and weakening Asian currencies.
The rupee closed at 83.2775 against the dollar, barely changed from its previous close, which had marked a record low. The currency hit its previous record closing low of 83.2675 on September 18, Reuters reported.
The dollar index remained steady, and Asian currencies, especially the Korean won, showed weakness.
A foreign exchange trader at a foreign bank told Reuters that the rupee is “slowly weakening but remains sticky as usual”.
This is because of the Reserve Bank of India’s likely interventions that have limited the currency’s weakness.
According to the report, the central bank supplied US dollars during trading sessions. State-run banks also sold US dollars, likely on behalf of the RBI when the rupee reached its weakest level during the day.
Near the end of the session when the rupee fell to 83.28, its weakest level during the day, state-run banks were seen selling US dollars again, likely on behalf of RBI, four traders told Reuters.
“Uncertainty in the Middle East and higher energy prices will see investors continue to back the energy-independent dollar for the time being,” ING Bank said in a note, as per Reuters.
For now, the RBI is likely to keep defending the 83.30 level on the rupee but 83.40 would be the next support if that level is breached, Sajal Gupta, head of forex and commodities at Nuvama Wealth Management’s institutional desk, told Reuters.
