Rupee falls 1 paisa to record low of 85.92 against US dollar in early trade

The rupee slipped 1 paisa to its record low of 85.92 against the US dollar in early trade on Thursday, the third straight session of downfall, weighed down by a stronger American currency and higher crude oil prices.

Forex traders said the relentless outflow of foreign funds amid soaring US bond yields boosted the American currency, while subdued domestic equity markets pushed the rupee down further.

At the interbank foreign exchange, the rupee opened at its historic low level of 85.94 and inched up to 85.92 against the greenback in initial deals, trading with a loss of 1 paisa from its previous close.

On Wednesday, the rupee plunged 17 paise to settle at its all-time low closing level of 85.91 against the dollar.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading 0.11 per cent lower but stayed elevated at 108.80.

The 10-year US bond yields also remained elevated at 4.66 per cent amid expectations of delayed interest rate cuts by the Federal Reserve on better growth prospects of the world's largest economy.

Brent crude, the global oil benchmark, fell 0.10 per cent to $76.08 per barrel in futures trade.

In the domestic equity market, the 30-share BSE Sensex was trading 243.43 points, or 0.31 per cent, lower at 77,905.06 points, while the Nifty was down 72.40 points, or 0.31 per cent, at 23,616.55 points.

Foreign institutional investors (FIIs) offloaded Rs 3,362.18 crore in the capital markets on a net basis on Wednesday, according to exchange data.