Rupee hovers near record lows amid strengthening dollar; ends at 88.79/$

Indian Rupee today: The domestic currency closed two paise lower at 88.79 against the greenback on Wednesday

The Indian Rupee continued to face pressure and ended slightly lower on Wednesday, hovering near record lows amid a stronger greenback.

 

The domestic currency closed two paise lower at 88.79 against the greenback on Wednesday, according to Bloomberg. The currency has fallen 3.72 per cent so far this year, while it hit an all-time low of 88.80 last week.

 

Over the past week, the pair has exhibited limited volatility, likely due to central bank interventions aimed at containing sharp fluctuations, Anindya Banerjee, head of currency & commodity research at Kotak Securities, said. "Continued foreign portfolio investment (FPI) outflows suggest sustained demand for dollars, which could exert upward pressure on dollar-rupee; however, exporter dollar sales and active Reserve Bank of India (RBI) intervention are helping to cap the pair’s rise." 

 

   

Overall, the pair remains range-bound, influenced by domestic flows and central bank actions, while global currency dynamics, particularly a stronger US dollar, may provide additional upward support, Banerjee said. "On the technical front, immediate resistance is seen near 89.00, with a more significant barrier around 90.00, while key support levels lie at 88.40 and 87.75."

 

A breakout in the rupee is possible unless the RBI continues to defend the crucial 88.80 level, Anil Kumar Bhansali, head of treasury and executive director at Finrex Treasury Advisors LLP, said earlier. The rupee was expected to trade in the 88.50-89.00 range for the day, as IPO-related inflows remain subdued with most subscriptions expected on the final day, he added. 

 

LG Electronics India's IPO got off to a strong start on Tuesday, with its share sale fully subscribed on day one, while WeWork India’s IPO sailed through on the final day of subscription. Meanwhile, Tata Capital’s mega share sale was fully subscribed today, its final day. According to NSE provisional data, foreign portfolio investors bought shares worth ₹1,440.6 crore on Tuesday, snapping a 10-day selling spree. 

 

The dollar index extended its gains to a four-week high, supported by weakness in the euro and yen, as well as safe-haven demand amid a US government shutdown that has delayed key economic data releases. The measure of the greenback against a basket of six major currencies was up 0.36 per cent at 98.93.

 

In commodities, crude oil prices rose after Opec+ decided on a modest increase in production. Brent crude price was up 1.27 per cent at 66.27 per barrel, while WTI crude prices were higher by 1.36 per cent at 62.57 per barrel, as of 3:32 PM IST.