Rupee hits new closing low of 88.80 amid weak global risk sentiment

Weak global sentiment and a stronger dollar kept the rupee under pressure, prompting likely RBI intervention through state-run banks to curb excessive volatility

The rupee settled at a new low of 88.80 per dollar on Tuesday as it continued to face depreciating pressure amid fragile global risk sentiment, despite some easing in US-China trade tensions, said dealers.

 

The local currency settled 12 paisa lower against the previous close of 88.68 per dollar. It has depreciated by 3.75 per cent so far in the current financial year, whereas, it has witnessed 3.59 per cent depreciation in the current calendar year.

 

While the rupee has been hovering near record low in the current month, the volatility remains low on likely intervention by the Reserve Bank of India, said dealers. However, the market now eyes when the central bank might allow the exchange rate to drift towards 89 and beyond.

 

“The RBI has been protecting the 88.80 level,” said a dealer at a state-owned bank. “The next stop has to be 89 and 89.50 if we break this level,” he added.

 

The rupee has depreciated by 0.1 per cent in the current month so far.

 

“The rupee traded under mild pressure today, slipping around 12 paise against the US dollar, as global risk sentiment remained fragile despite some easing in US- China trade tensions. The greenback regained strength on the back of renewed safe-haven demand, keeping emerging market currencies on the defensive. The rupee briefly flirted with its record low levels, but found support from likely central bank intervention through state-run banks, which helped contain excessive volatility,” said Abhishek Goenka, founder & CEO of IFA Global.

 

The dollar index was trading 0.3 per cent higher at 98.42. It measures the strength of the greenback against a basket of six major currencies.