The rupee on Friday fell below the 84 level and closed at 84.06 against the dollar amid outflows from foreign portfolio investors (FPIs) and firm crude oil prices.
During intra-day trades, the domestic unit hit a record intra-day low of 84.07.
The Reserve Bank of India (RBI) has been defending the 84-level: there have been reports of the central bank informally telling market participants to take aggressive bets against the rupee.
At the interbank foreign exchange, the rupee opened at 83.96 against the dollar, one paisa higher than the previous day’s close of 83.97. It rose to the day’s high of 83.96 but tumbled to 84.07 and then closed 9 paise lower at 84.06.
“After keeping it in a range below 83.99 since August8, 2024, the Reserve Bank of India (RBI) finally allowed the rupee to weaken past 84 as FPIs who have emerged as big sellers in equities continued to buy USD to take their money out of the country,” said Anil Kumar Bhansali, head of treasury and executive director, Finrex Treasury Advisors LLP.
“We can now expect the rupee to move to 84.25 in the short term. Importers will continue buying at all dips and exporters may now hold their exports with a stop below 83.95. The Iran/Israel/Lebanon news also does not seem good and could keep oil strong and the rupee weak,” he added.
They, however, added that much will depend on the RBI. The central bank has often maintained that it does not target a specific level for the rupee, but looks at curbing volatility.
Sensex falls
Equity benchmark indices Sensex and Nifty endedlower on Friday, dragged by selling in banking, utility and financial stocks as investors turned cautious ahead of the release of industrial production data.
Unabated foreign fund outflows and a depreciating rupee amid geopolitical tensions also hit investors’ sentiment, traders said.
In a volatile trade, the 30-share BSE Sensex fell 230.05 points or 0.28 per cent to close at 81381.36. During the day, it declined 307.26 points or 0.37 per cent to a low of 81304.15.
The NSE Nifty slipped 34.20 points or 0.14 per cent to 24964.25. It hit an intraday low of 24920.05.
“The market traded sideways due to a lack of fresh triggers for decisive momentum. The uptick in the US 10-year yield due to the unexpected rise in US core inflation and caution ahead of the result season added layers of sentiment in the market,” Vinod Nair, head of research, Geojit Financial Services, said.
From the Sensex pack, Tata Consultancy Services, Mahindra & Mahindra, ICICI Bank, Maruti Suzuki India, Power Grid, Axis Bank and Adani Ports & Special Economic Zones were among the laggards.
