Rupee vs Dollar: The weakness of the Indian rupee is continuously deepening and this decline is showing no signs of stopping. Despite the US Federal Reserve cutting interest rates, the rupee has not been able to get any support. On Friday, the last trading day of the week, the rupee once again witnessed a huge fall and it fell by 24 paise and reached a new record low of Rs 90.56 per dollar against the US dollar.
Market experts say that uncertainty regarding India-US trade deal and continuous withdrawal of foreign portfolio investors have put deep pressure on the rupee, due to which investor sentiment remains weak.
Rupee at record low level
According to foreign exchange traders, there has been a sharp rise in the prices of precious metals like gold and silver in the international market, due to which the demand for dollars from importers has suddenly increased. When imports become expensive, companies buy more dollars, due to which the domestic currency comes under further pressure. The rupee opened at 90.43 in the interbank foreign exchange market on Friday, but soon slipped to 90.56. This shows a weakness of 24 paise from the previous closing price.
On Thursday too, there was a huge fall of 38 paise in the rupee and it closed at its lowest ever level of 90.32. At the same time, the dollar index—which reflects the strength of the US dollar against six major global currencies—rose marginally to 98.37, putting additional pressure on the rupee.
The initial trading in the domestic stock market today was positive. Sensex rose by 170 points to 84,988 and Nifty rose by about 98 points to 25,997. Despite the strong opening market, it did not have any significant impact on the rupee.
What do experts say?
Mirae Asset Sharekhan analyst Anuj Chaudhary says that the ongoing uncertainty regarding the India-US trade deal is the biggest reason for the fall of the rupee. Although the rally in the domestic market and weak US dollar tried to limit the decline, investors’ caution still remains. According to Choudhary, the rupee is likely to continue to fluctuate in the coming days, as the delay in the trade agreement between the two countries may increase apprehension in the minds of investors. He estimates that the dollar-rupee exchange rate may remain in the range of 90.10 to 90.75 in the near term. Any intervention by the central bank can support the rupee at lower levels.
Meanwhile, the price of Brent crude oil in the international market increased by 0.67 percent to $ 61.69 per barrel. At the same time, foreign institutional investors (FIIs) made a net sale of shares worth Rs 2,020 crore on Thursday, which increased the selling pressure on the market and had a negative impact on the rupee.
Also read: When and how much did RBI cut the repo rate, how did it give big relief to the public?
