Rupee hits another record low, now at 74.27 against US dollar

Marco Green
October 9, 2018

The rupee erased all its morning gains to hit a new record low of 74.27 against the USA dollar in afternoon trade Tuesday after Brent crude breached the USD 84 a barrel-mark again and the American currency strengthened overseas. The dollar's strength against major global currencies weighed on the rupee sentiment, forex dealers were quoted as saying in the PTI report.

Mumbai: The rupee dropped by another 14 paise to 73.90 per dollar in early trade Monday as the United States currency gained in global markets amid unabated foreign fund outflows.

The dollar strengthened after China's central bank eased its domestic policy to support the economy.

It recovered to a high of 73.76, but failed to sustain the momentum and plunged to 74.10 and finally closed at 74.06, down by 30 paise, marking its fifth straight session of decline.

"However, the impact of falling crude was not seen on the rupee mainly due to strong dollar index and high USA bond yield", said V.K. Sharma, head, private client group and capital market strategy at HDFC Securities.

Foreign institutional investors (FIIs) sold shares net worth a net of Rs 1,805 crore Monday, provisional data showed.

"The balance of payments (BoP) turning negative has led to a sharp depreciation in rupee in the past two months".

The Reserve Bank of India's (RBI) stance, along with an expected hike in the USA lending rates and high crude oil prices are expected to further exert pressure on the Indian rupee in the coming week, experts say. The US 10 year bond yields surged to 3.26 percent.

Nomura further noted that policy responses to the depreciating currency have been muted thus far and with limited policy response, the concerns on the rupee have risen significantly.

Meanwhile, the benchmark BSE Sensex continued to fall, losing another 67.72 points, or 0.20 percent, to 34,309.27 in early trade Monday.

Other reports by Click Lancashire

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