Rupee Slumps 53 Paise To Fresh Low, Posts Sharpest Decline Since 2023

The rupee weakened by 53 paise to a record low of 85.79 against the US dollar on Friday, posting its steepest single-day decline since Feb. 2023. It opened at 85.32 and had closed at 85.26 on Thursday.

“The rupee continues to hover near the lower end, weighed down by the elevated dollar index and subdued trading volumes. Despite aggressive measures by the RBI, including a net sale of $9.28 billion in October, the rupee has depreciated from 84 to 85 levels within just two months,” said Amit Pabari, Managing Director of CR Forex Advisors.

According to Pabari, the pressure on the currency is expected to persist due to month-end dollar demand from local oil companies. “We anticipate the dollar-rupee pair to trade within the range of 85.00 to 85.50 in the near term,” he added.

Anil Kumar Bhansali, Head of Treasury and Executive Director at Finrex Treasury Advisors LLP, pegged the rupee's expected range for the day between 85.15 and 85.35. “Exporters may continue to wait with a stop loss at 85.05 since the rupee remains in a weakening mode due to dollar demand. Importers should buy all dips,” he said.

The dollar index held firm above the 108 mark, supported by stronger-than-expected US jobless claims data, while the Japanese yen hovered near a five-month low of 157.70. Tokyo's inflation data indicated a possible policy rate hike by the Bank of Japan, with Tokyo CPI rising 2.4% year-on-year in December.

In global markets, the Dow Jones had a muted close, while Nasdaq and S&P ended lower in thin holiday trade. Nikkei rose 1.15% on a weaker yen, while Hang Seng and China markets remained under pressure in early trade.

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