Mumbai: The rupee rebounded slightly from its all-time low, appreciating by 5 paise to 84.83 against the US dollar in early trading on Friday, supported by favourable domestic inflation data.
However, gains were limited due to a strong US dollar and volatile domestic equity markets, along with continued foreign fund outflows, according to forex traders.
At the interbank foreign exchange market, the rupee opened at 84.85 and strengthened to 84.83, marking a 5-paise increase from its previous close. On Thursday, the rupee had declined by 5 paise, closing at its lowest level of 84.88. The previous record low was on December 9, when it ended 20 paise lower at 84.86.
Recent data released on Thursday revealed that India’s retail inflation dropped to 5.48% in November, falling within the Reserve Bank’s comfort zone due to easing food prices. This decline provides potential room for a rate cut in February’s policy meeting under the new Governor, Sanjay Malhotra.
However, industrial production growth (IIP) slowed to 3.5% year-on-year in October 2024, primarily due to weaker performance in the mining, power, and manufacturing sectors, official data showed.
Meanwhile, the dollar index, which measures the US currency against six major peers, rose 0.12% to 106.77. Analysts attributed the dollar’s strength to US inflation data meeting expectations, fuelling hopes for a Federal Reserve rate cut.
Global oil benchmark Brent crude edged up 0.01% to USD 73.42 per barrel in futures trade.
On the domestic equity front, the Sensex fell by 388.68 points (0.48%) to 80,901.28, while the Nifty dropped 115.20 points (0.47%) to 24,433.50. Both indices ended lower on Thursday.
Foreign Institutional Investors (FIIs) were net sellers on Thursday, offloading shares worth Rs 3,560.01 crore, according to exchange data.
