The rupee settled at 88.76 against the U.S. dollar, its weakest ever closing level and down slightly from its close at 88.71on Friday: Reports
MUMBAI: The Indian rupee closed near its all-time low on Monday on continuous foreign portfolio outflows and month end dollar demand from companies.
The rupee settled at 88.76 against the U.S. dollar, its weakest ever closing level and down slightly from its close at 88.71on Friday.
The currency declined to an all-time low of 88.7975 last week. According to traders, the central bank intervened with dollar sales through state run banks to prevent further depreciation of the rupee ahead of the Monetary Policy Committee meeting on October 1.
They said that the RBI has been frequently intervening to support the rupee over recent sessions as tariff issues and US H-1B visa fees continued to rattle Indian markets with foreign portfolio investors shunning Indian stocks on concerns that domestic exports will be severely affected by these
twin issues.
At the interbank foreign exchange, the rupee opened at 88.69 against the US dollar, and finally settled for the day with a loss of 7 paise at 88.79, its lowest-ever closing level so far. On Friday, the rupee had rebounded from its all-time low to close 4 paise higher at 88.71 against the US dollar. The rupee had fallen to a fresh lifetime low of 88.76 against the American currency on Thursday. The domestic unit has declined nearly 3.5 per cent this quarter.
The Indian 10-year yields rose from 6.47 per cent to 6.56 per cent due to government’s increased borrowings through the 10-year paper under the October-March borrowing plan. This increased supply has led to heavy selling in the near-term bonds taking yields higher. Gold reached an all-time high amidst dollar weakness and demand for safe-haven assets.
“The range for rupee tomorrow is expected at 88.50 to 89.00,” said Anil Bhansali, executive director at Finrex Advisors. Traders expect the rupee to remain under pressure on foreign portfolio outflows, high crude prices and month end dollar demand from importers. Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading at 97.96, lower by 0.19 per cent. Brent crude, the global oil benchmark, was trading 1.37 per cent lower at $ 69.17 per barrel in futures trade.
