Rupee Extends Record Slump Against US Dollar
The Indian currency remained under pressure amid heavy sell-off in domestic financial markets.
The rupee extended record against the US dollar on Thursday amid foreign fund outflows from domestic financial markets. The Indian currency slumped 23 paise to a new low of 90.42 a dollar.
The Indian currency has declined against the US dollar for session in a row.
The Reserve Bank of India has sold the greenback in the market to restrict runaway depreciation in the domestic unit, Bloomberg reported.
"Right now, the Indian rupee is under pressure because the 90 was an important psychological level, which was broken in the previous session. The Reserve Bank of India has been intervening, but not as aggressively as seen in the past. Till the outcome of the Monetary Policy Committee, the weakn likely continue. The next crucial level is 90.50," said Anindya Banerjee, head, commodity and currency, Kotak Securities.
The rupee’s sustained weakness against the US dollar and a strong GDP print have reduced hopes of a rate cut, despite earlier comments from RBI Governor Malhotra highlighting record-low inflation, said Jigar Trivedi, a senior research analyst at Reliance Securities.
In December, foreign portfolio investors have taken out Rs 4,211 crore in December, while in the entire November they sold Indian equities worth Rs 3,765 crore. This weighed on the Indian currency.
Meanwhile, the dollar index, which gauges the strength of the greenback against six major currencies, was trading 0.12% higher at 99.00 level as of 10:20 a.m.
The rupee settled 31 paise lower at 90.19 against the US dollar on Wednesday.
