Mumbai: The rupee depreciated further by 13 paise to hit a new lifetime closing low of 82.30 against the US dollar on Friday as a firm American currency and risk-averse sentiment among investors weighed on the local unit.
Moreover, a negative trend in domestic equities and elevated crude oil prices sapped investor appetite, forex traders said, as per PTI report.
At the interbank foreign exchange market, the local currency opened at 82.19, then fell further to 82.43. It finally settled at an all-time low of 82.30 against the American currency, registering a decline of 13 paise over its previous close.
On Thursday, the Indian currency for the first time closed below the 82 levels against the greenback. It plunged 55 paise to close at a record low of 82.17 against the US currency.
This week, the rupee depreciated 90 paise or 1.11 percent against the dollar due to rising crude oil prices and growing expectations of aggressive rate hikes by the US Fed.
“Rupee fell to fresh all-time lows as the dollar continued to strengthen against its major crosses. Rally in global crude oil prices also weighed on the overall market sentiment,” said Gaurang Somaiya, Forex, and Bullion Analyst, Motilal Oswal Financial Services.
OPEC+ group of nations announced its largest supply cut since 2020 ahead of European Union embargoes on Russian energy.
“Dollar strengthened ahead of the important non-farm payrolls number that will be released today. Better-than-expected data could extend gains for the dollar,” the news agency report quoted Somaiya as saying.
PTI quoting Anuj Choudhary – Research Analyst at Sharekhan by BNP Paribas, said the Indian rupee depreciated as India’s FY23 GDP has been revised lower by World Bank to 6.5 percent from its previous estimates of 7.5 percent warning of spillovers from global monetary tightening and Russia’s invasion of Ukraine.
“Rupee touched a record low on weak domestic markets and a strong US Dollar. The dollar index is currently trading at 112 levels. The surge in crude oil prices also put downside pressure on Rupee. However, FII inflows cushioned the downside,” Choudhary said.
Choudhary further noted that the rupee is likely to trade with a negative bias on risk aversion in the global market and overall strength in the US Dollar.