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The Indian rupee slipped 1 paisa to an all-time low of 84.38 against the US dollar in early trade on Monday, according to PTI. This decline is attributed to persistent foreign fund outflows and a weak trend in domestic equities.
As per PTI, forex traders have indicated that 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 market, the rupee opened at the record low of 84.38 against the greenback, marking a drop of 1 paisa compared to its previous close.
On Friday, as per PTI, the rupee had already fallen by 5 paise, hitting a new lifetime low of 84.37 against the US dollar, registering a decline for the third consecutive session. Last week, the rupee faced significant pressure due to the US elections and continued foreign fund outflows. According to PTI, following nearly USD 12 billion in equity sell-offs in October, foreign funds have continued to withdraw in November, with outflows of around USD 1.6 billion in the first 10 days alone.
Amit Pabari, MD of CR Forex Advisors, commented that this trend reflects the overvaluation of Indian equities and disappointing Q2 earnings. As per PTI, he further added that in the medium term, the rupee is expected to trade within the 83.80 to 84.50 range, as the Reserve Bank of India (RBI) is likely to cap the downside of the rupee with sufficient foreign exchange reserves.
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Meanwhile, according to PTI, the dollar index, which tracks the strength of the greenback against a basket of six major currencies, was trading 0.05 per cent higher at 105.05. On the global oil front, Brent crude, the international oil benchmark, fell 0.37 per cent to USD 73.60 per barrel in futures trade.
On the domestic equity market front, as per PTI, the Sensex was trading 12.47 points lower, or 0.02 per cent down, at 79,473.85 points. The Nifty fell by 5.65 points, or 0.02 per cent, to 24,142.55 points.
According to PTI, Foreign Institutional Investors (FIIs) were net sellers in the capital markets on Friday, offloading shares worth Rs 3,404.04 crore, according to exchange data.
Furthermore, as per PTI, India's foreign exchange reserves fell by USD 2.675 billion to USD 682.13 billion for the week ending November 1, as reported by the RBI on Friday. In the previous week, the reserves had dropped by USD 3.463 billion to USD 684.805 billion. At the end of September, India's forex reserves had reached an all-time high of USD 704.885 billion, PTI added.
(With inputs from PTI)
