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The Indian rupee on Thursday hit a fresh closing low of 83.39 against the US dollar due to the rise in dollar index and crude oil prices, dealers said. The Indian currency had settled at 83.33 per dollar on Wednesday.
The previous all-time closing low for the rupee was 83.35 a dollar on November 20. The rupee had hit a record low of 83.48 (intraday) against the dollar on November 10.
While emerging market currencies regained their ground against the US dollar this month, the rupee lagged behind its peers, primarily due to persistent demand for the dollar among importers.
In November, the rupee depreciated by 0.2 per cent, even though the dollar index fell by around 4 per cent in the same period. Consequently, the rupee emerged as the worst-performing currency among its Asian peers during the month, being the sole currency to depreciate while other currencies appreciated.
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“There has been persistent demand for the dollar in the entire month because of demand supply metrics as the dollar outflows outpaced dollar inflows,” said V R C Reddy, head of treasury at Karur Vysya Bank. “As of today (Thursday), the dollar strengthened and crude also inched up which weighed on the Rupee,” he added.
South Korean won was the best performer with 4.7 per cent appreciation.
In the current financial year, the rupee has depreciated by 1.5 per cent, whereas it has depreciated by 0.8 per cent in the current calendar year so far. However, it had appreciated by 0.16 per cent in the first six months of the current calendar year on the back of robust foreign inflows.
The dollar index, which measures the strength of the greenback against a basket of six major currencies, rose to 103.20, against 102.58 on Wednesday.
Market participants said that the rupee faced continued strain as crude oil prices neared $84 per barrel ahead of the announcement of the annual production target by the Organization of the Petroleum Exporting Countries (Opec+).
The Reserve Bank of India (RBI) was speculated to have been on the sidelines on Thursday.
“The dollar index rose which weighed on the rupee today (Thursday),” said Anindya Banerjee, V-P, currency derivatives & interest rate derivatives at Kotak Securities Ltd. “The RBI was not that active in the market,” he added.
The local currency is expected to depreciate further in December as the demand for Dollar is speculated to continue.
