Mumbai: The rupee on Wednesday touched a fresh record low of 92.63 against the US dollar, amid a firming greenback and continued foreign fund outflows.
At the interbank foreign exchange, the rupee opened at 92.42 and moved in a narrow range before weakening to its all-time low during the session.
The currency had closed at 92.37 on Tuesday.
“The Indian rupee slipped to a fresh record low as a break below the 92.50 level triggered selling pressure, exacerbated by thin dollar liquidity ahead of a bank holiday,” said Dilip Parmar, Senior Research Analyst at HDFC Securities.
Despite a backdrop of strong risk appetite and softer crude prices, the currency faced aggressive dollar demand from importers, according to Parmar.
“With geopolitical tensions stoking fears of a wider trade deficit, year-end demand remains robust. We see USD/INR facing resistance at 92.85, with support at 92.40,” he added.
Amid the ongoing West Asia conflict, the rupee has weakened by more than 1 per cent.
Echoing similar concerns, Jateen Trivedi, VP Research Analyst (Commodity and Currency) at LKP Securities, said the currency remains under pressure due to rising import costs.
“The rupee traded sharply weaker at around 92.60, marking fresh all-time lows, as persistent pressure from a rising import bill continues to weigh on the currency. Elevated crude oil prices, coupled with shipment disruptions through the Strait of Hormuz, are increasing concerns over sustained higher import costs for India,” he said.
“The macro backdrop remains unfavourable, with crude likely to stay elevated, keeping the rupee under pressure. In the near term, the rupee is expected to trade in the range of 92.25–92.95 against the US dollar,” Trivedi added.
Meanwhile, the dollar index, which tracks the greenback against a basket of six currencies, was marginally higher at 99.62.
Brent crude, the global oil benchmark, was trading slightly lower at around $103.2 per barrel in futures trade.
In the domestic equities market, benchmark indices were trading higher, with the Sensex up 719.77 points at 76,790.61 and the Nifty rising 215.75 points to 23,796.90.
Foreign institutional investors (FIIs) remained net sellers, offloading equities worth Rs 4,741.22 crore on Tuesday, according to exchange data.
In the commodities market, precious metals witnessed a sharp correction. Gold declined 0.54 per cent to Rs 1,55,142, while silver fell 1.42 per cent to Rs 2,49,501.
(IANS)
