Rupee hit an all-time low on Tuesday, breaching the 91 level against the US dollar for the first time. With this fall, the currency extended its losing streak, repeatedly plunging to fresh record lows amid sustained foreign fund outflows and ongoing trade-related uncertainty.In the last 10 trading sessions, the currency has weakened from the 90-per-dollar level to 91, trimming almost 1% against the greenback in just the past five sessions. On 11:38 AM, Rupee was trading at 91.075 against USD.Earlier in the day, the rupee had already touched a record low of 90.83 against the greenback, after openin trading, down 0.1% at 90.79. The pressure followed a steep sell-off in the previous session, when the currency had fallen to an all-time intra-day low of 90.80 before settling at a record closing level of 90.78. The rupee had shed 29 paise on Monday alone, extending its recent run of losses.Also read | Rupee at historic low: How 9% real depreciation could reshape India’s economy VK Vijayakumar, chief investment strategist, Geojit Investments Limited told TOI that this shark slump was not expected today as the trade data had exceeded expectations. “Further sharp weakness in rupee was not expected today since the November trade data has come better-than-expected. Covering of short positions may be a factor in today’s decline. Sustained FII selling is acting like a vicious cycle pulling the rupee down. Normally when rupee declines, the RBI intervenes by selling dollars to stem the decline of the rupee.”Explaining RBI’s position behind the decline, Vijayakumar added that RBI’s policy has been to let the currency decline. “Low inflation in India ( 0.71% in November ) is the reason for this non-intervention by the central bank. Rupee depreciation is not hurting the economy. India’s November trade deficit declining to $24.53 billion from 41.68 billion in October is positive for the rupee.” The latest fall comes after the rupee had already declined 17 paise last Friday to close at 90.49, which was then its lowest-ever level against the US dollar. Earlier on Monday, the domestic unit had opened at 90.53 at the interbank foreign exchange market. Looking ahead, analysts expect the currency to remain under strain. Anuj Choudhary, Research Analyst, MiraeAsset ShareKhan, said the rupee is likely to stay under pressure in the near term. “The rupee is expected to trade with a negative bias amid delay in Indo-US trade deal and FII outflows,” he said. “A weak dollar and any intervention by the RBI may also support the rupee at lower levels. Investors may watch for central bank monetary policy decisions from BOE, ECB and BoJ. USD-INR spot price is expected to trade in a range of Rs 90.30 to Rs 91.”
Historic low! Rupee breaches 91-mark for the first time; currency reaches 91.07 against US dollar
