Rupee falls 23 paise to hit fresh record low of 85.50 against US dollar
Mumbai, Dec 27: The rupee fell steepest in almost two years to hit its lifetime intraday low of 85.80 before a suspected central bank intervention helped recover some of its losses and settled 23 paise lower at a record low of 85.50 (provisional) against the US dollar on Friday due to a strong greenback amid increased month-end demand from banks and importers.
According to analysts, the Reserve Bank's stance to hold on to its dollar payments in short-term forward contracts added to the shortage of greenback, with importers rushing to meet their month-end payment obligations.
Despite robust sentiment in domestic equity markets, the rupee was weighed down by sustained outflow of foreign funds and rising crude oil prices, they added.
At the interbank foreign exchange, the rupee opened weak at 85.31 and plunged 53 paise to the lowest-ever intraday level of 85.80.
The unit finally ended the session at 85.50 (provisional) against the greenback, losing 23 paise from its previous closing level of 85.27.
The rupee's earlier sharpest one-day fall of 68 paise was recorded on February 2, 2023.
The domestic unit has been hitting new lows almost every day in the past couple of weeks. It had plunged 12 paise to 85.27 against the dollar on Thursday after declining 13 paise in the previous two sessions.
"The central bank holds USD 21 billion in short-side forward contracts set to mature in December and January. Market speculation suggests that the RBI has refrained from rolling over these maturing forwards, leading to a scarcity of dollars and an oversupply of rupees.
"Moreover, dollar liquidity in the market remains very low, amplifying the upward momentum in the pair. This imbalance has propelled the USD-INR pair towards 85.8075 levels," said Amit Pabari, MD of CR Forex Advisors.
According to Anuj Choudhary – Research Analyst at Mirae Asset Sharekhan, the rupee hit a record low on dollar demand from importers towards the end of the month and outflows from foreign investors (FIIs).
"Rising US treasury yields and crude oil prices also weighed on the rupee," he said and projected the USD-INR spot price in a range of Rs 85.30 to Rs 85.85, saying traders may take cues from goods trade balance data from the US.
Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading higher by 0.04 per cent at 107.94, while the 10-year benchmark US Treasury yield rose 0.76 per cent, hitting its seven-month high level of 4.61 per cent.
Brent crude, the global oil benchmark, rose 0.15 per cent to USD 73.37 per barrel in futures trade.
In the domestic equity market, the 30-share BSE Sensex settled 226.59 points or 0.29 per cent higher at 78,699.07 points, while Nifty went up 63.20 points, or 0.27 per cent to close at 23,813.40 points.
Foreign Institutional Investors (FIIs) were net sellers in the capital markets on Thursday, as they offloaded shares worth Rs 2,376.67 crore, according to exchange data.
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.
UDF leaders see local body poll trends as pointer to 2026 Assembly elections in Kerala
Thiruvananthapuram (PTI): Buoyed by the strong performance of the Congress-led UDF in the local body polls, KPCC president Sunny Joseph said on Saturday that the front's results indicated the people had rejected the LDF government.
According to early trends, the UDF was leading in more grama panchayats, block panchayats, municipalities and corporations than the LDF.
The local body polls were held in two phases in the state earlier this week.
ALSO READ: Cong candidate who moved Kerala HC for name reinstatement in voter list, wins
Speaking to reporters here, Joseph said the people of Kerala had extended their support to the UDF.
"We could expose the LDF government’s anti-people stance and the people understood it. The LDF’s fake propaganda was rejected by the people. The UDF is moving towards a historic victory," he said.
He said a united effort, proper preparations, good candidate selection and hard work had resulted in the Congress and the UDF’s victory in the elections.
Asked about the prospects in the Thiruvananthapuram Corporation, Joseph said the party was studying the matter and would comment later.
LDF convenor T P Ramakrishnan said the results would be closely examined.
According to him, the government had done everything possible for the people.
"Why such a verdict happened will be examined at the micro level. People’s opinion will be considered and further steps will be taken," he said.
He added that decisions would be taken after analysing the results. "If any corrective measures are required, we will initiate them and move forward," he said.
AICC leader K C Venugopal said the results showed that people had begun ousting those who, he alleged, were responsible for the loss of gold at Lord Ayyappa’s temple.
"This trend will continue in the Assembly elections as well. It is an indication that the people are ready to bring down the LDF government," he said.
Venugopal said the UDF had registered victories even in CPI(M) and LDF strongholds.
"I congratulate all UDF workers for their hard work. Congress workers and leaders worked unitedly," he said.
Referring to remarks made by Chief Minister Pinarayi Vijayan against the Congress on polling day, Venugopal said the voters had responded through the verdict.
"I do not know whether the chief minister understands that the people are against him. Otherwise, he does not know the sentiment of the people. The state government cannot move an inch further," he said.
He said the results indicated a strong comeback for the UDF in Kerala.
Asked whether the Sabarimala gold loss issue had affected the LDF in the local polls, Venugopal said the CM and the CPI(M) state secretary did not take the issue seriously.
"We took a strong stand on the matter. The BJP played a foul game in it," he alleged.
On the BJP's role in the local body elections, Venugopal alleged that the party operated with the CPI(M) 's tacit support.
"The CPI(M) supported the central government on issues such as PM-SHRI, labour codes and corruption in national highway construction. The CPI(M) is facing ideological decline, and the state government’s policies are against the party’s own decisions," he said.
Meanwhile, LDF ally Kerala Congress (M) leader Jose K Mani said the party could not win all the wards it had expected in the elections.
He congratulated winners from all parties and said the party would closely examine the losses and identify shortcomings. "Later, we will take corrective measures," he added.
Senior Congress leader and MP Rajmohan Unnithan said the trends in the local body elections indicated that the UDF would return to power in the 2026 Assembly elections.
"We will win 111 seats as in 1977 and return to power in 2026. The anti-government sentiment of the people is reflected in the elections," he said.
Unnithan said the people were disturbed and unhappy with the present government.
"The trend indicates the end of the LDF government," he added.
CPI(M) MLA M M Mani said the people had shown ingratitude towards the LDF despite benefiting from welfare schemes.
"After receiving all welfare schemes and living comfortably, people voted against us due to some temporary sentiments. Is that not ingratitude," he asked.
Mani said no such welfare initiatives had taken place in Kerala earlier.
"People are receiving pensions and have enough to eat. Even after getting all this, they voted against us. This is what can be called ingratitude," he said.
Muslim League state president Panakkad Sayyid Sadiq Ali Shihab Thangal said the results were beyond expectations.
"The outcome points towards the Secretariat in Thiruvananthapuram, indicating that a change of government is imminent. We are going to win the Assembly election," he said.
