After 10 days, the rupee has once again touched a lifetime low against the dollar. In fact, the rupee declined due to delay in trade deal with America, increase in dollar index, demand for dollar in the local market, withdrawal of foreign investors and fall in crude oil prices. If experts are to be believed, the rupee may see a further decline against the dollar and may even reach the level of 90. Let us also tell you at what level the rupee is trading against the dollar?
Rupee on life time low
The rupee fell 34 paise to an all-time low of 89.79 (provisional) against the US dollar in intraday trading on Monday due to the fall in domestic stock markets and continuous outflow of foreign capital. Foreign currency traders said that the rupee also came under pressure due to the strengthening of the dollar and the rise in crude oil prices in the international market. Apart from this, there was continuous pressure on the local currency due to heavy demand for dollars from importers.
At the interbank foreign currency market, the rupee opened at 89.45, then lost momentum, falling to a record low of 89.79 (provisional) against the US dollar in day’s trade, showing a decline of 34 paise from its previous close. On Friday, the rupee had fallen nine paise and closed at 89.45 against the US dollar. On November 21, the rupee fell 98 paise to close at its all-time low of 89.66 against the US dollar.
Why did the rupee fall?
Anil Kumar Bhansali, head of treasury and executive director, Finrex Treasury Advisors LLP, said the rupee was under pressure due to heavy buying by foreign portfolio investors (FPIs), sale of stake in various companies due to high valuations, oil purchases, gold purchases and repayments by corporates and the central government. Bhansali further said that trade tensions with America continue and a resolution is expected by the end of the year.
On November 28, Commerce Secretary Rajesh Aggarwal said that India hoped to reach a framework trade agreement with the US this year which would benefit Indian exporters. The two countries have been in talks for a long time, and the first tranche of the bilateral trade agreement was expected to be in place by 2025, but the imposition of tariffs on Indian exports by the Trump administration has hit hurdles.
Dollar rises, stock market falls
Meanwhile, the dollar index, which reflects the dollar’s strength against six currencies, was trading 0.04 percent higher at 99.50. In the international market, Brent crude futures increased by 1.96 percent to reach $ 63.60 per barrel. In the domestic stock market, both the benchmark indices, Sensex and Nifty, fell from their record highs by afternoon. The Sensex was trading 122.58 points or 0.14 per cent lower at 85,584.09, while the Nifty was at 26,156.60, down 46.35 points or 0.18 per cent. According to exchange data, foreign institutional investors sold shares worth Rs 3,795.72 crore on a net basis on Friday.
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