The Indian rupee depreciated to a fresh low, just shy of breaching 79 against the U.S dollar.
The domestic currency fell 0.3% over its last close to 78.97 against the greenback on Wednesday. The rupee depreciated to record lows in each of the last two sessions—the previous being 78.77.
The currency has weakened about 6% since the start of the year, according to Bloomberg data.
The central bank has been intervening, likely to stop the currency from touching 79 a dollar, according to Anindya Banerjee, vice president, currency derivatives and interest rate derivatives at Kotak Securities Ltd.
According to a research note by IFA Global, foreign investment outflows and global risk aversion made investors cautious as selling from the emerging market intensified. The oil importers, it said, were also seen at the dollar-buying side on the back of month-end flows net-off. The elevated crude price further dented the sentiments for the Indian rupee.
Anil Kumar Bhansali, head of treasury at Finrex Treasury Advisors, said the rupee has fallen to 79 levels much earlier than anticipated and seems to be now covering up its earlier slow depreciation. “Soon we could see a new figure of 80 added up to it.”
Exporters can now keep waiting with a stop loss of 78.75, while importers to just buy and buy more on dips if they get it, he said.
Most Asian currencies have depreciated and with equities unable to give much relief, more depreciation is on the cards, Bhansali said.
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