Rupee dives 98 paise to hit all-time low of 89.66 against US dollar
_vb_51.jpeg)
Mumbai (PTI): The rupee plunged 98 paise to close at its lifetime low of 89.66 against the US dollar on Friday, due to a huge demand for the greenback in the domestic forex market amid widespread selling pressure in local and global equities and trade-related uncertainties.
Concerns over a possible bubble building around artificial-intelligence technology stocks also spooked investor sentiments, forex traders said.
Besides, renewed foreign fund outflows added to the gloom, they added.
At the interbank foreign exchange market, the rupee opened almost flat at 88.67 and before turning extremely volatile in the afternoon session. During the day trade, it moved between a high of 88.59 and a low of 89.66.
In the steepest fall in over three years, the domestic currency nosedived 98 paise to finally settle at 89.66 against the American currency. The previous biggest one-day fall was recorded at 99 paise against the dollar on February 24, 2022.
On Thursday, the rupee depreciated 20 paise to close at 88.68 against the US dollar.
"The Indian rupee witnessed a dramatic move on Friday, breaking its all-time high...in a sudden spike that caught the market completely off guard. Unlike earlier sessions, where news flow guided the price action, this move was largely demand-driven, triggered by an unexpected wave of dollar buying at a time when supply stayed quiet," CR Forex Advisors said in a note.
"What made the move even more striking was that all other major indicators remained broadly stable -- the dollar index, crude oil prices, EM currencies, and even gold hardly moved. This calm backdrop further reinforced that Friday’s jump in USD/INR was not driven by global cues, but purely by domestic dollar demand overwhelming available supply."
Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was 0.09 per cent up at 100.17.
Brent crude, the global oil benchmark, was trading 2.18 per cent lower at USD 62.00 per barrel in futures trade.
On the domestic equity market front, the Sensex declined 400.76 points, or 0.47 per cent, to settle at 85,231.92, while the Nifty tanked 124.00 points, or 0.47 per cent, to 26,068.15.
Foreign institutional investors sold equities worth Rs 1,766.05 crore on a net basis on Thursday, according to exchange data.
The global risk-off sentiment has spilt into currency markets after a sharp overnight sell-off in cryptocurrencies and AI-linked technology stocks, Anindya Banerjee, Head of Research Currency, Commodity and Interest Rate Derivatives, Kotak Securities, said.
"The sudden unwinding of risk trades is weighing on emerging-market currencies, including the Indian rupee. Adding to the pressure is the lingering uncertainty around the proposed India-US trade deal, which markets had hoped would offer clarity on the bilateral economic outlook. With no firm timelines emerging, sentiment remains fragile," Banerjee said.
Reserve Bank Governor Sanjay Malhotra on Thursday said the central bank does not target any level for the rupee, and the recent depreciation of the domestic currency against the US dollar is primarily due to trade uncertainties following the imposition of tariffs by the US administration.
"We do not target any level. Why is the rupee depreciating? (It) is because of the demand. It is for the markets to decide... It is a financial instrument, and there is a demand for dollars, and if the demand for dollars goes up, the rupee depreciates; and if the demand for the rupee goes up, the dollar comes down, then it appreciates," Malhotra said at an event in the national capital.
The governor also exuded confidence that India will secure a favourable trade deal with the US, which will help ease the pressure on the current account.
Let the Truth be known. If you read VB and like VB, please be a VB Supporter and Help us deliver the Truth to one and all.
RCB score imposing 240/4 against MI in IPL match
Mumbai (PTI): Royal Challengers Bengaluru skipper Rajat Patidar, Phil Salt and Virat Kohli blasted half-centuries as the defending champions put up an imposing 240 for 4 -- the second-highest score this season -- against Mumbai Indians in their Indian Premier League match here on Sunday.
Salt smashed a 36-ball 78, studded with six boundaries and as many maximums, while stalwart Kohli made a composed 50 off 38 balls, as the duo put on a polished 120-run stand for the opening wicket.
Salt was dismissed by Shardul Thakur in his very first over, the team's 11th, providing a huge sigh of relief to MI.
Skipper Rajat Patidar then took over from where Salt left off, scoring a rapid 53 off just 20 balls, studded with four boundaries and five sixes, as RCB made quite a statement.
Earlier, Mumbai Indians skipper Hardik Pandya won the toss and opted to field.
Brief scores: 240 for 4 in 20 overs (Phil Salt 78, Virat Kohli 50, Rajat Patidar 53, Tim David 35 not out).
