Indian rupee at all-time low: Crude oil at $107, FII outflows and dollar strength push currency to 94.70
The Indian rupee took a severe beating on Friday, crashing 74 paise to touch a new all-time low of 94.70 against the US dollar in intraday trade. The sharp fall came as rising crude oil prices, a firming dollar, and the unresolved conflict in West Asia continued to pile pressure on the domestic currency.
Forex traders pointed to a combination of factors dragging the rupee lower — heavy dollar demand from oil importers, relentless selling by foreign institutional investors, and a broad-based selloff in Indian equities.
The rupee kicked off the session at 94.18 on the interbank foreign exchange but found no support as the day progressed. It slipped past the 94.50 mark before eventually touching 94.70 — a drop of 74 paise from its previous close. Just two sessions ago, on Wednesday, the currency had settled at 93.96, which was itself a record closing low. Markets were shut on Thursday for Ram Navami.
"Oil companies have been consistently buying dollars, and that's kept the rupee under pressure. Exporters are in no hurry to convert their inflows, while importers are actively covering their dollar payables," said Anil Kumar Bhansali, Head of Treasury and Executive Director at Finrex Treasury Advisors LLP.
The dollar index, which tracks the greenback against six major currencies, edged up 0.08 per cent to 99.67, reflecting the broader strength of the American currency in global markets.
On the energy front, Brent crude — the international oil benchmark — remained elevated at USD 107.4 per barrel in futures trade, down a marginal 0.53 per cent after a sharp overnight rally. Elevated oil prices are particularly damaging for India, which imports nearly 85 per cent of its crude requirements, putting constant pressure on the rupee.
Domestic stock markets offered no comfort either. The BSE Sensex was nursing losses of over 1,190 points, down 1.58 per cent at 74,082.69, while the NSE Nifty slid 352 points, or 1.51 per cent, to 22,954.20 during the session.
Adding to the gloom, foreign institutional investors offloaded Indian equities worth Rs 1,805.37 crore on a net basis on Wednesday, exchange data showed. Continued FII outflows have been a persistent headwind for both the rupee and the broader market.
With no immediate resolution in sight on the geopolitical front and crude staying stubbornly high, currency analysts expect the rupee to remain under pressure in the near term.
- With inputs from agencies
