us dollar The rupee fell by 17 paise to its all-time low of 85.91 per dollar for the second consecutive trading session on Wednesday. This is a big fall in the rupee amid rising crude oil prices and strengthening of the American currency. Forex analysts said subdued sentiment in domestic stock markets and continued capital outflows by foreign institutional investors also weighed on the rupee. At the same time, investors remained cautious about the weak economic growth forecast by the government. The rupee opened at 85.82 in the interbank foreign exchange market. It closed at 85.91 per dollar, down 17 paise from its previous close. On Tuesday, the rupee fell by six paise and closed at 85.74 per dollar.
What is the reason for weakening of rupee?
Anil Kumar Bhansali, head of treasury and executive director, Finrex Treasury Advisors LLP, said that the fall is due to the strength of the US dollar. This was boosted by positive economic indicators from the US, including strong labor market data and increased activity in the services sector. These factors have caused US bond yields to rise, making the dollar more attractive to investors. In response to this, the Reserve Bank of India has intervened through public sector banks to mitigate the rupee losses, he said. Despite these efforts, the rupee’s exchange rate slide reflects broader concerns about India’s economic growth and capital flows.
Dollar index jumps to record high
Meanwhile, the dollar index, which gauges the US dollar’s position against six major currencies, rose 0.35 per cent to 108.76. The yield on 10-year US bonds also remained high at 4.67 per cent amid the possibility of the Federal Reserve delaying interest rate cuts. Global oil benchmark Brent crude rose 0.90 percent to $77.74 per barrel in futures trade. The 30-share BSE Sensex fell 50.62 points to close at 78,148.49. National Stock Exchange’s Nifty fell marginally by 18.95 points to 23,688.95 points. According to stock market data, foreign institutional investors (FIIs) were net sellers in the capital market. He sold shares worth a net Rs 3,362.18 crore on Wednesday.
Latest Business News