The rupee dropped 4 paise to settle at a new record low of 85.83 (provisional) against the US dollar on Monday, reflecting the pressure of a volatile global economy and weak domestic markets.
Opening at 85.77 at the interbank forex market, the rupee touched an all-time low of 85.84 during intraday trading before closing marginally higher. The slide comes amid a steep 1.59% drop in the Sensex, a 1.62% fall in the Nifty, and continued foreign fund outflows. On Friday, FIIs withdrew ₹4,227.25 crore, worsening the market sentiment.
Anuj Choudhary, Research Analyst at Mirae Asset Sharekhan, attributed the rupee’s dip to surging US bond yields, global demand for the dollar as a safe haven, and domestic concerns, including fears over the HMPV virus. “Weak domestic markets and persistent foreign institutional investor (FII) outflows further pressured the rupee,” he added.
While the dollar index softened slightly to 108.44, the rupee showed little relief. Brent crude prices also dropped, trading at $76.27 per barrel, offering some respite but not enough to offset other pressures.
India’s forex reserves fell by $4.112 billion to $640.279 billion, according to the Reserve Bank. Analysts predict that interventions by the RBI and a softer US dollar might provide some stability. For now, traders are closely monitoring upcoming US services PMI and factory orders data.
The rupee’s decline, coupled with global uncertainty, reflects broader economic pressures. While experts caution against overreacting, they urge vigilance and pragmatic steps to navigate these challenging times.