Rupee At 85.2: Indian Currency Ends At Record Closing Low Against Surging Dollar
During intraday trade, the rupee fell to a new low of 85.21 against the US dollar.
The Indian rupee closed at a record closing low of 85.20 per dollar on Tuesday, weakening by 8 paise from its previous close of 85.12. During intraday trade, the currency fell to a new low of 85.21 amid sustained dollar strength and global pressures.
The rupee had opened 2 paise stronger at 85.10 against the greenback but quickly gave up gains as the session progressed. The initial uptick was supported by thin trading volumes ahead of the Christmas holiday season.
The dollar index remained elevated at 108.14, buoyed by US economic resilience, rising Treasury yields at 4.58%, and widening interest rate differentials. Brent crude oil inched up to $72.64 per barrel during the day.
“Rupee opened flat and made a new low of 85.21 as the dollar index crossed 108 again and US 10-year yields rose. Inflows remain tepid while outflows continue on all fronts,” said Anil Kumar Bhansali, Head of Treasury and Executive Director at Finrex Treasury Advisors LLP.
ALSO READ
Stock Market Today: Nifty, Sensex Resume Decline After One-Day Rise; Infosys, SBI Top Draggers
Bhansali noted that persistent dollar demand continues to weigh on the rupee. “Exporters may continue to wait with a stop loss at 84.90, while importers are advised to buy on all dips,” he added.
Amit Pabari, managing director at CR Forex Advisors, highlighted global factors, including the Federal Reserve’s hawkish stance and weakness in the offshore Chinese yuan, as key drivers behind the rupee's depreciation. “Domestically, a widening trade deficit and sluggish economic growth continue to exert downward pressure on the currency,” he said.
Additionally, India’s foreign exchange reserves have declined from their peak of $704.89 billion in September to $654.85 billion, according to the latest RBI data.
Looking ahead, analysts expect thin trading volumes during the holiday season to keep market volatility in check. However, the dollar index is likely to remain elevated, maintaining pressure on emerging market currencies. Experts anticipate the rupee to trade within a range of 84.70 to 85.20 in the near term.
