The rupee’s new low at 83.14 prompts discussions about fiscal policies and their impact on currency valuation.
In a noteworthy development in the financial markets, the Indian rupee saw a decline, settling at 83.14 (provisional) against the US dollar. This represents a decrease of 10 paise compared to its previous close.
Forex experts attribute this depreciation of the Indian rupee to the recent surge in the US dollar, reaching its highest levels in the past six months. Additionally, the rupee faced downward pressure due to elevated crude oil prices.
At the interbank foreign exchange market, the Indian currency commenced the day at 83.08 against the US dollar. Throughout the trading session, it fluctuated within the range of 83.02 to 83.18 before ultimately closing at 83.14 (provisional).
This recent valuation marks a concerning low, with the rupee having hit its lowest point of 83.13 on August 21 earlier this year. In the preceding trading session, the rupee had experienced a decline of 33 paise, closing at 83.04 against the US dollar.
Meanwhile, the dollar index, which measures the strength of the US dollar against a basket of six major currencies, saw a marginal decrease of 0.07 percent, settling at 104.73.
In the global oil markets, Brent crude futures, a key benchmark for global oil prices, registered a decline of 0.67 percent, reaching USD 89.44 per barrel.
Anuj Choudhary, a Research Analyst at Sharekhan by BNP Paribas, commented on these developments, stating, “Brent crude breached the USD 90/barrel mark. The US dollar gained strength due to safe-haven demand, driven by concerns over a global economic slowdown following China’s Caixin Services PMI falling to an 8-month low at 51.8 in August, versus a forecast of 53.6.”
Choudhary further added, “We anticipate that the rupee will continue to trade with a negative bias, influenced by risk aversion in global markets and a robust US dollar. FII outflows and rising crude oil prices may exert additional pressure on the rupee. However, potential intervention by the RBI and expectations of no rate hike by the Federal Reserve in its September FOMC meeting could provide support to the rupee at lower levels. Traders will closely monitor data such as ISM services PMI from the US.”
In the domestic stock markets, the 30-share BSE Sensex closed with a gain of 100.26 points or 0.15 percent at 65,880.52, while the broader NSE Nifty advanced by 36.15 points or 0.18 percent, closing at 19,611.05.
Foreign Institutional Investors (FIIs) were net sellers in the capital markets on the previous trading day, offloading shares worth ₹1,725.11 crore, according to exchange data.
This financial update underscores the impact of global economic dynamics on India’s financial landscape, with fluctuations in currency and commodity markets affecting investor sentiment and market trends.
