Rupee falls to new low of 84.71 on growth concerns, tracking Asian peers

The rupee depreciated by 0.48 per cent against the dollar in November, following a decline of 0.25 per cent in October

The rupee depreciated sharply to 84.71 per dollar in the early trade after weak domestic economic data and tracking the Asian peers, said dealers.

 

The local currency had settled at Rs 84.49 per dollar on Friday.

 

The dollar index was trading 0.5 per cent higher at 106.26. The index measures the strength of the greenback against a basket of six major currencies.

 

The rupee depreciated 0.48 per cent against the dollar in November, after falling 0.25 per cent in October.

 

The US dollar strengthened after President-elect Donald Trump warned of 100 per cent tariffs on Brics countries, if they try to undermine the US dollar, prompting investors to focus on upcoming US economic data for clues on the Federal Reserve's interest rate path.

 

Key reports, including job openings and the payrolls data, as well as speeches from Fed officials, are expected this week. Markets currently price in a 65 per cent chance of a 25bps rate cut at the Fed's December meeting, with just two more cuts projected for 2025.

 

“There is selling in equities and the dollar has also strengthened,” said a dealer at a state-owned bank. “We are looking at Asian currencies.”

 

Market participants said that the Reserve Bank of India intervened in the foreign exchange market via dollar sales near 84.70 per dollar mark.

 

“RBI is near 84.70 per dollar, this level will be held,” said a dealer at a state-owned bank.

 

India’s economic growth slowed more sharply than anticipated in the July-September period of FY25, dropping to a seven-quarter low of 5.4 per cent, surprising analysts who had projected growth to hover around 6.5 per cent in the quarter.

 

The deceleration in growth momentum, driven by an industrial slowdown and a moderation in investment demand raised concerns.

 

Brent crude oil traded above $72 per barrel on Monday, buoyed by signs of China's sluggish economic recovery and expectations that OPEC+ will likely delay a planned production increase. Geopolitical tensions in the Middle East also added a risk premium, as Israel resumed attacks on Lebanon despite an existing ceasefire agreement.