Rupee falls to all-time low of 84.40 against US dollar in early trade

12 November,2024 10:12 AM IST |  Mumbai  | 

The Indian rupee fell by 2 paise to 84.40 against the US dollar, marking a new all-time low in early trade on Tuesday. Persistent foreign fund outflows and a stronger US dollar continue to pressure the currency.

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The Indian rupee weakened by 2 paise, hitting an all-time low of 84.40 against the US dollar in early trading on Tuesday. This decline was attributed to continued foreign fund outflows and the strength of the US dollar in the international markets, which dampened investor sentiment.

According to forex traders, the rupee is expected to trade within a range of 83.80 to 84.50 in the medium term. The Reserve Bank of India (RBI) is likely to prevent any significant further depreciation of the currency, supported by its substantial foreign exchange reserves.

At the interbank foreign exchange market, the rupee opened at 84.39 against the dollar, before falling further to 84.40, registering a drop of 2 paise compared to its previous close. On Monday, the rupee had fallen 1 paise to reach a new all-time low of 84.38 against the greenback, marking the fourth consecutive session of losses.

CR Forex Advisors MD Amit Pabari explained that the RBI has been crucial in stabilising the rupee and limiting its depreciation. Despite a significant 6.30% drop in the Emerging Market Currencies Index since October 2, the rupee has only fallen 0.69%, reflecting the RBI's effective defence of the currency.

Meanwhile, the dollar index, which measures the strength of the US dollar against a basket of six other currencies, was up by 0.09% at 105.63. In global oil markets, Brent crude, the international benchmark for oil, decreased by 0.25% to USD 71.65 per barrel in futures trade.

On the domestic equity front, the Sensex was up by 77.35 points, or 0.02%, to 79,573.50, while the Nifty gained 19.90 points, or 0.08%, to 24,161.20.

According to data from exchanges, Foreign Institutional Investors (FIIs) were net sellers in the Indian capital markets on Monday, having sold shares worth Rs 2,306.88 crore. Pabari noted that foreign investments in Indian equities have significantly dropped, with over USD 2 billion withdrawn in November following an USD 11 billion outflow in October. This decline in foreign capital interest is attributed to overvalued Indian stocks and weak Q2 earnings, according to Pabari.

An SBI research report released on Monday suggested that the rupee may depreciate by 8-10% against the US dollar under a potential second term for former US President Donald Trump. The report, titled US Presidential Election 2024: How Trump 2.0 Impacts India's and the Global Economy, highlighted that while the rupee could face short-term depreciation, it might later recover and appreciate.

As per PTI, the ongoing trends indicate that the rupee's performance remains influenced by both global economic factors and the actions of the RBI.

(With inputs from PTI)

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