Mumbai, Nov 11 (PTI) Declining for the fourth straight session, the rupee dropped 1 paisa to hit a new lifetime low of 84.38 against the US dollar on Monday, weighed down by persistent foreign fund outflows and a muted trend in domestic equities.
Forex traders said the rupee is likely to remain under pressure unless there is a softening in the dollar index or a slowdown in foreign fund outflows.
At the interbank foreign exchange, the rupee opened at 84.38 against the US dollar. During the session, the local currency touched a high of 84.37 and a low of 84.39. It finally settled at 84.38, registering a loss of 1 paisa against its previous close.
On Friday, the rupee dropped 5 paise to hit the lowest level of 84.37 against the US dollar, registering a decline for the third straight session.
In the last four sessions, the local unit has lost 29 paise against the greenback.
The USD-INR pair fell to a record low on Monday as the US dollar index strengthened on Donald Trump’s growth agenda optimism. Foreign investors, following an outflow of USD 11 billion in October, have withdrawn around USD 1.50 billion from the Indian equities in November.
The Reserve Bank’s intervention may support the domestic currency. Moreover, traders look forward to the India and the US CPI inflation data scheduled to be released this week, Praveen Singh – Associate VP, Fundamental Currencies and Commodities, Sharekhan by BNP Paribas, said, adding the domestic currency is expected to trade with a bearish tilt in near future.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.29 per cent higher at 105.30.
Brent crude, the global oil benchmark, fell 1.04 per cent to USD 73.10 per barrel in futures trade.
In the domestic equity market, the 30-share BSE Sensex rose 9.83 points, or 0.01 per cent, to close at 79,496.15 points, while Nifty fell 6.90 points, or 0.03 per cent, to settle at 24,141.30 points.
Foreign Institutional Investors (FIIs) were net sellers in the capital markets on Monday, as they offloaded shares worth Rs 2,306.88 crore, according to exchange data.
Jateen Trivedi, VP Research Analyst – Commodity and Currency, LKP Securities, said, the rupee maintained its position at record-low levels as the dollar index remained neutral and FIIs showed limited selling activity at the start of the new week.
“This week’s focus will be on the US CPI data release, which could influence the dollar’s trajectory. Additionally, US Fed Chairperson Jerome Powell’s upcoming speech is expected to provide insights that may drive price action in the dollar, currently trading at a four-month high of 105.21,” he added.
Meanwhile, India’s forex reserves declined by USD 2.675 billion to USD 682.13 billion for the week ended November 1, the RBI said on Friday.
In the previous week, the overall reserves had dropped by USD 3.463 billion to USD 684.805 billion. At September-end, the reserves had hit an all-time high of USD 704.885 billion. PTI DRR HVA
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