The Indian rupee closed at a record low on Thursday amid a strong dollar and likely dollar purchases by overseas investors and oil marketing companies.
The local currency weakened 20 paise to close at an all-time low of Rs 83.65 against the US dollar, according to Bloomberg data. It had closed at Rs 83.45 on Wednesday.
Geopolitical tensions in West Asia and constant buying of dollars by foreign portfolio investors and oil marketing companies have pushed the local currency to a fresh low, according to Anil Bhansali, executive director at Finrex Treasury Advisors LLP.
The local currency decline falls in line with the weakening of all of its Asian peers, except Hong Kong and Taiwan, as a strong dollar weighed.
Despite today's fall, the rupee remains the second best performing Asian currency this year, behind Hong Kong.
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Crude oil remained steady ahead of the release of US weekly inventory data, which may show another rise in nationwide crude inventories. Brent crude was trading 0.41% higher at $85.42 per barrel on a solid demand outlook. At 105.43, the US dollar index was trading 0.17% higher.
"Fed officials indicated a continued hawkish stance, dampening hopes for an interest rate cut until December. This stance strengthened the dollar index, putting pressure on emerging markets and the rupee," said Amit Pabari, managing director of CR Forex Advisors.
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