The Indian rupee plummeted to a record low against the US dollar as foreign capital outflows and rising crude oil prices intensify economic pressures.
Key Points
- The Indian rupee hit a record intra-day low of 93.08 against the US dollar due to a stronger greenback and persistent FII outflows.
- Elevated global crude oil prices are adding pressure on the rupee, contributing to its depreciation.
- The Reserve Bank of India (RBI) is intervening by selling dollars to protect the rupee from further decline.
- Foreign institutional investors (FIIs) continue to sell Indian equities, exacerbating the rupee's weakness.
- Despite the rupee's fall, domestic equity markets showed a positive opening, cushioning against a sharper decline.
The rupee fell 19 paise to its record intra-day low of 93.08 against the US dollar in early trade on Friday as the greenback strengthened further and FII outflows continued unabated amid the ongoing West Asia conflict.
Elevated global crude oil prices put further pressure on the local unit, while a positive opening at the domestic equity markets cushioned against a sharper fall, according to forex traders.
At the interbank foreign exchange, the local unit opened at 92.92 against the greenback before breaching the 93-mark for the first time to trade at 93.08, down 19 paise from its previous close.
The rupee slumped 49 paise to close at a record low of 92.89 against the US dollar on Wednesday.
Forex markets were closed on Thursday on account of Gudhi Padwa.
What experts say
"The rupee looks vulnerable with the RBI the only one protecting it from further fall by selling dollars.
"FPIs were sellers on Thursday when Sensex and Nifty fell to a 21-month low," Anil Kumar Bhansali, Head of Treasury and Executive Director, Finrex Treasury Advisors LLP, said.
Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading 0.17 per cent higher at 100.25.
Brent crude, the global oil benchmark, was trading 1.64 per cent lower at USD 106.9 per barrel in futures trade.
On the domestic equity market front, the Sensex rebounded from Thursday's crash, surging 960.67 points, or 1.29 per cent, to 75,167.91, while Nifty was up 311.50 points, or 1.35 per cent, to 23,313.65.
Foreign institutional investors sold equities worth Rs 7,558.19 crore on a net basis on Thursday, according to exchange data.
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