The Indian Rupee dipped to 84.39 (provisional), its lowest level ever, losing 1 paisa, as foreign fund outflows persisted and the dollar rallied against other major currencies.
According to Forex traders, the rupee is expected to fluctuate between 83.80 and 84.50 in the medium term. RBI’s intervention and substantial foreign exchange reserves will likely prevent sharp depreciation of the INR.
The Indian rupee began trading at 84.39 against the US dollar in the interbank foreign exchange market, fluctuating between a high of 84.39 and a low of 84.41. The rupee finally settled at 84.40 (provisional), a decline of 1 paisa against the US currency. With this, the rupee extended its losing streak to five consecutive sessions.
What Lies Ahead For The Indian Rupee?
Over the past five sessions, the rupee has depreciated by 32 paise against the US dollar. The dollar index, a measure of the US currency’s performance against six major peers, edged up 0.06% to 105.60.
“The rupee traded weaker as foreign funds continued their selling spree in the Indian market. However, the rupee received some relief from falling crude and gold prices, as the reduced pace of decline could potentially improve India’s import bill in the coming months,” said Jateen Trivedi, VP Research Analyst – Commodity and Currency, LKP Securities.
Additionally, US Fed Chairperson Jerome Powell’s upcoming speech is highly anticipated, as it’s expected to provide valuable insights that could impact the dollar’s value.
According to an SBI research report released Monday, the Indian rupee may weaken by 8-10% against the US dollar during Donald Trump’s second term as US President.
It is worth noting that Foreign investors withdrew a substantial Rs 23,911 crore from Indian equities in November, till now. These investors pulled out Rs 94,017 crore from Indian share market in October 2024. This figure takes their net outflow for this calendar year to Rs 17,318 crore.
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