The rupee on Friday hit its record low of 92.02 before ending a tad higher at 91.97 against the US dollar, amid a firm American currency and volatile geopolitical cues.
Forex traders said sustained withdrawal of foreign funds and a negative trend in domestic equities weighed on investor sentiment.
At the interbank foreign exchange, the rupee opened at 91.89 and gained ground, touching 91.82 against the greenback during intraday trade. The currency touched its lowest-ever level of 92.02 before ending the session at 91.97 against the dollar, registering a gain of just 2 paise from the previous closing level.
On Thursday, the rupee ended flat at its lowest level of 91.99 against the dollar. The currency recorded its previous lowest level of 92-a-dollar on January 23.
What led to rupee recovery?
“Indian rupee recovered from all-time lows on an overnight decline in crude oil and commodity prices. However, recovery in the US dollar index and FII outflows capped sharp gains. Dollar index rose after Donald Trump said that he would announce his nominee to head the US Federal Reserve,” said Anuj Choudhary, Research Analyst, Mirae Asset ShareKhan.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.45 per cent higher at 96.57.
Brent crude, the global oil benchmark, was trading 0.96 per cent lower at USD 70.03 per barrel in futures trade.
On the domestic equity market front, Sensex declined 296.59 points or 0.36 per cent to settle at 82,269.78, while the Nifty fell 98.25 points or 0.39 per cent to 25,320.65.
Foreign institutional investors sold equities worth ₹393.97 crore on Thursday, according to exchange data.
According to the Economic Survey, tabled in parliament on Thursday, the rupee is “punching below its weight” and “investor reluctance to commit funds to India warrants examination at a time when inflation is under control, and the growth outlook is favourable”.
