Rupee hits all-time low against US dollar, falls 4 paise to 84.76
New Delhi| The strengthening of the US currency in the foreign market and continued withdrawal of foreign portfolio investors gave investor sentiment that the rupee fell 4 paise to an all-time low of 84.76 rupees per dollar in early trade.
Forex traders said the rupee’s fall was mainly due to Donald Trump’s rhetoric on the BRICS currency, political instability in the eurozone, weak domestic economic indicators and continued withdrawals in foreign portfolios. Newly-elected President Donald Trump threatened on Saturday to impose a 100 percent tariff on BRIC group countries if they attempted to weaken the U.S. dollar.
In addition, market participants are also awaiting signals from the RBI’s monetary policy due on 6 December, which will likely focus on the balance between inflation and growth. In the interbank foreign exchange market, the rupee opened at 84.75 and moved in a limited range, touching an all-time low of 84.76, representing a fall of 4 paise against the previous closing price. On Monday, the rupee fell 12 paise to close at an all-time low of 84.72 against the US dollar. The dollar index, which measures the strength of the dollar against six currencies, was trading at 106.51, up 0.07 per cent.
Brent crude, the global oil standard, rose 0.18 percent in futures trading to reach $71.96 a barrel. Meanwhile, Minister of State for Finance Pankaj Chaudhary said in Parliament on Monday that despite geopolitical tensions and other adverse conditions in the Middle East, the rupee remains one of the best performing Asian currencies, indicating India’s strong economic fundamentals. Is.
He said that one of the main reasons for the devaluation of the rupee is the widespread strengthening of the US dollar. “During the year 2024, the dollar index has increased by about 4.8 percent as of November 19, 2024”, he said. Most recently, the dollar index touched a level of 108.07 on 22 November 2024, its highest level in more than a year, putting pressure on emerging-market currencies
In addition, geopolitical tensions in the Middle East and uncertainty surrounding the US election results also added to the difficulties. Currency devaluation is likely to increase export competitiveness, which has a positive impact on the economy. Devaluation, on the other hand, may increase the prices of imported goods.
He further said that RBI monitors major developments taking place across the world, which may have an impact on the US dollar-rupee exchange rate. On the domestic stock market front, the 30-share benchmark index Sensex was trading at 80,440.41 points, up 192.33 points, or 0.24 per cent. Nifty rose by 53.10 points or 0.22 percent to reach 24,329.15 points.
Traders said continued selling pressure by foreign funds put further pressure on the currency. Foreign institutional investors (FIIs) were net sellers in capital markets on Monday as they sold shares worth Rs 238.28 crore, according to exchange data.
