Rupee falls 4 paise to record low of 78.37 against US dollar

The rupee fell 4 paise, closing at a life-time low of 78.37 against the US dollar on Monday amid ongoing foreign fund outflows and fears of a slowdown. Strong crude oil prices on the international market and weak macro data are putting pressure on the domestic unit. However, a weak overseas dollar supported the local currency, forex dealers said.

In the interbank forex market, the local unit opened sharply higher at 78.24 against the dollar, but balanced all of its initial gains to settle 4 paise lower at a record low of 78.37. It witnessed an intra-day high of 78.24 and a low of 78.37. In the previous session, the rupee had settled at 78.33 against the greenback. “The rupee has tipped to a new all-time low amid continued foreign fund outflows, weaker macro data and fears of a slowdown gripping markets,” said Sugandha Sachdeva, Vice President – Commodity and Currency Research, Religare Broking Ltd.

The currency has slipped on the downside path despite the softness of the greenback as domestic stock indices wiped out much of the gains from the early session. India’s forex reserves have fallen for the third straight week to $590.59 billion as the RBI ramps up its intervention in forex markets to curb the sharp decline in the Indian rupee, Sachdeva said. The rupee traded positively on the rise in capital market participation, also giving up gains for the same as what profit-taking was seen in prices following an open in capital markets, said Jateen Trivedi, VP Research Analyst at LKP Securities.

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“The rise in the rupee is unsustainable as every time the rupee sees an increase in dollar purchases, inflation keeps the rupee small but falls against the dollar higher. Rupee can be seen in a range of 78.15-78.50,” Trivedi said. In the domestic stock market, the BSE Sensex finished 433.30 points or 0.82 percent higher at 53,161.28, while the broader NSE Nifty 132, 80 points or 0.85 percent rose to 15,832.05 The dollar index, which measures the dollar’s strength against a basket of six currencies, fell 0.21 percent to 103.97. The global oil benchmark rose 0.32 percent to $113.48 a barrel, with foreign institutional investors remaining net sellers in the capital market Friday as they sold shares worth Rs 2,353.77 crore, according to exchange data.

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