The rupee again closed at a record low to the dollar on Thursday coerced by a stronger greenback overseas, poor inflows and rising crude oil prices.

At the inter-bank forex market, the local unit finished at 85.26 against the dollar compared with its previous close of 85.20. The currency opened on a weak note at 85.22 and remained under pressure as the US dollar index (DXY — which gauges its strength against a basket of six global currencies) remained firm.

During intra-day trades, the rupee fell to a low of 85.28 and later closed at 85.26 which is a new lifetime low.

The dollar and treasuries have been on an upswing since the victory of Donald Trump. This has been attributed to his likely protectionist policies which are seen as lifting inflation and growth.

The prospects of higher inflation have led to the markets betting on fewer rate cuts by the Fed in 2025.

As against the earlier expectations of the central bank cutting rates on four occasions, it is now felt that it may reduce rate only 2-3 times next year.

The DXY was trading firm at 108.26 at the time of this report after opening at 108.17 over its previous close of 108.20.

Forex circles added that apart from the dollar’s strength, outflows from FIIs in the equity markets (due to holidays), month end demand for the greenback from importers and rising crude oil prices also acted against the rupee. Brent crude for February 2025 delivery was trading at $74.10 per barrel compared with its previous close of $73.58.

Anuj Choudhary, research analyst at Mirae Asset Sharekhan, said the rupee fell to a fresh all-time low on strong dollar and rising US treasury yields that are at the highest levels in seven months.

He added that the surge in crude oil prices, month-end and year-end dollar demand and FII outflows may also weigh on the rupee

“However, any intervention by the Reserve Bank of India (RBI) may support the rupee at lower levels. Traders may take cues from weekly unemployment claims data from the US USD-INR spot price is expected to trade in a range of 85.10 to 85.45.”

Sensex flat

It was a dull session in the equity markets with the 30-share BSE Sensex closing flat at 78472.48 against its previous finish of 78472.87. On the NSE, the Nifty gained 22.55 points, or 0.10 per cent, to settle at 23750.20.

``Persistent FII selling, rising bond yields and stronger dollar index continue to dampen investor sentiments. With no major triggers in the near term, markets are likely to consolidate in a broad range. Investors will closely monitor earnings revival in the third quarter, as it will be the next significant factor for driving the markets,’’ Siddhartha Khemka of Motilal Oswal Financial Services said.