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

Representative Image

Representative Image

The rupee declined by 4 paise to close at its life-time low of 78.37 against US dollar on Monday due to persistent foreign fund outflows and slowdown fears.

Firm crude oil prices in the international market and weak macro data put pressure on the domestic unit. However, a weak dollar overseas supported the local currency, forex dealers said. At the interbank forex market, the local unit opened sharply higher at 78.24 against the greenback, but pared all of its initial gains to settle lower by 4 paise 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 tip-toed to a fresh record low amid persistent foreign funds outflows, weaker macro data, and slowdown fears gripping the markets,” Sugandha Sachdeva, Vice President – Commodity and Currency Research, Religare Broking Ltd, said.

The currency has drifted on the downwards trajectory despite the softness seen in the greenback, as domestic equity indices erased much of the early session gains. India’s forex reserves have witnessed a fall for the third consecutive week to USD 590.59 billion as the RBI is stepping up its intervention in the forex markets to curb the steep decline in the Indian rupee, Sachdeva said.

The rupee traded positive on rise of capital market participation, also gave up gains for the same as some profit-taking was witnessed in the prices after a gap up opening in the capital markets, Jateen Trivedi, VP Research Analyst at LKP Securities said. “The rise in the rupee is not acting sustainable as every time the rupee sees a rise dollar buying is witnessed as the inflation overhang keeps the rupee rise minor but fall against dollar higher. Rupee can be seen in a range of 78.15-78.50,” Trivedi said.

On the domestic equity market front, the BSE Sensex ended 433.30 points or 0.82 per cent higher at 53,161.28, while the broader NSE Nifty rose 132.80 points or 0.85 per cent to 15,832.05. The dollar index, which measures the greenback’s strength against a basket of six currencies, slipped 0.21 per cent to 103.97.

Brent crude futures, the global oil benchmark, rose 0.32 per cent to USD 113.48 per barrel. Foreign institutional investors remained net sellers in the capital market on Friday as they offloaded shares worth Rs 2,353.77 crore, as per exchange data.