Rupee slips past 90 mark against US dollar for the first time
PTC Web Desk: The Indian rupee hit a new record low on Wednesday, slipping past the 90 mark against the US dollar for the first time. The currency opened at 89.96 and weakened further to an all-time intra-day low of 90.15 before recovering slightly to 90.02 in early trade. This was 6 paise weaker than Tuesday’s close.
According to forex traders, the fall was mainly driven by continued dollar buying by banks and persistent foreign institutional investor (FII) outflows. However, the decline was partially limited by a weaker US dollar index and a slight drop in global crude oil prices.
On Tuesday, the rupee had already ended at a record closing low of 89.96, dragged down by strong importer demand for dollars and short-covering by market participants.
Sources said stalled India-US trade discussions and heavy FPI outflows were adding pressure on the rupee despite a softer dollar index. They warned that the currency could even touch 91 if RBI intervention reduces near the 90 level.
The RBI’s Monetary Policy Committee (MPC) began its meeting on Wednesday, with the interest rate decision due on December 5. A possible rate cut, analysts say, may further weigh on the rupee ahead of the US Federal Reserve’s policy update on December 10.
Meanwhile, the dollar index was trading 0.13% lower at 99.22. Brent crude futures were almost flat at USD 62.43 per barrel.
In the domestic stock market, the Sensex fell 165.35 points to 84,972.92, while the Nifty slipped 77.85 points to 25,954.35 in early trade. Foreign Institutional Investors sold equities worth Rs 3,642.30 crore on Tuesday, according to exchange data.
- With inputs from agencies
