Rupee Hits Record Low Against US Dollar

The rupee fell to a new record low against US dollar on Tuesday. It slumped 39 paise to 89.95 against the US currency.

The Indian currency tumbled 14 paise to 89.70 against the greenback, marked the lowest opening level. It settled at 89.56 a dollar in the previous session.

The dollar index, which gauges the strength of US unit against six major currencies, was trading steady at 99.41 as of 9:23 a.m.

"Each attempt at recovery has been fleeting, weighed down by steady dollar demand and ongoing uncertainty surrounding India’s trade dynamics with the U.S.," said Amit Pabari, managing director at CR Forex Advisors.

The Indian rupee has weakened on account of all round buying of dollar by about 1.05% in the past month with dollar demand from corporates, importers, foreign portfolio investors being the main reason while the high trade deficit of October has been one of the main culprit in which precious metals have been bought, said Anil Kumar Bhanshali, head, treasury, Finrex Treasury Advisors.

The Reserve Bank of India has been in the market selling dollars but it has also bought dollars when Indian Rupee rose thus keeping the demand intact. The short positions of RBI has created more volatility as it did yesterday, he said.