Indian rupee has recently hit a significant milestone, closing at an all-time low of 84.43 against the US dollar on November 14, 2024. This decline of 4 paise marks a continuation of the rupee’s downward trend, driven by several economic factors that are affecting investor sentiment and market dynamics.
The rupee traded in a tight range and closed 4 paise lower at an all-time low of 84.43 (provisional) against the US dollar on Thursday, weighed down by continued foreign fund outflows and strong dollar demand from investors. Forex traders said the bearish pressure on the USD/INR pair was mostly driven by persistent inflation and significant foreign outflows.
The rupee opened at 84.40 against the US dollar at the Interbank Foreign Exchange. During the session, the local currency touched a high of 84.39 and a low of 84.43. It finally settled against the greenback at a fresh all-time low of 84.43 (tentative), 4 paise lower than its previous close.
On Wednesday, the rupee moved in a narrow range and settled at 84.39 against the US dollar.
“The US dollar index hit a fresh cycle high of 106.76 as it approaches a tough resistance at 107.50,” said Praveen Singh – Associate VP, Fundamental Currencies & Commodities, BNP Paribas via Sharekhan.
“There was no relief on the US inflation front as data released yesterday showed the US core consumer price index rose 0.3 percent for the third month. It grew by 3.3 per cent year-on-year,” Singh said.
Meanwhile, the dollar index, which measures the greenback’s strength against a basket of six currencies, was trading up 0.30 percent at 106.80.
Brent crude, the global oil benchmark, rose 0.03 percent to USD 72.30 a barrel in futures trade.
Forex traders said that the USD-INR pair is likely to touch Rs. 85 levels, although intervention by the Reserve Bank of India (RBI) may slow the pace.
On the global front, China’s recent 1.4 trillion yuan stimulus, coupled with expectations of further fiscal support, has strengthened Chinese markets and added downward pressure on Indian assets, traders said.
Moreover, India’s inflation is putting additional pressure on the currency.
Wholesale price inflation rose to a four-month high of 2.36 percent in October on higher prices of food items, especially vegetables and manufactured goods, according to government data released on Thursday.
Retail inflation breached the RBI’s upper tolerance level, hitting a 14-month high of 6.21 percent in October, mainly due to rising food prices.
In the domestic equity market, the BSE Sensex ended down 110.64 points, or 0.14 percent, at 77,580.31, while the Nifty settled down 26.35 points, or 0.11 percent, at 23,532.70.
India’s merchandise exports rose 17.25 percent to USD 39.2 billion in October from USD 33.43 billion a year earlier, the latest government data released on Thursday showed.
Imports also rose 3.9 percent to USD 66.34 billion in October from USD 63.86 billion in the year-ago period. During the month under review the trade deficit or the gap between imports and exports stood at USD 27.14 billion.
Foreign institutional investors (FIIs) were net sellers in the capital market on Wednesday, as they bought Rs. 2,502.58 crore worth of shares were sold, according to exchange data.