Rupee Slips Past 91 Against US Dollar in Intra-Day Trade

Mumbai: The rupee weakened sharply on Tuesday, breaching the 91-per-dollar level for the first time during intra-day trade, as continued foreign fund outflows and uncertainty surrounding the India–US trade deal weighed heavily on the currency.

The rupee fell by 36 paise during the session. Over the past 10 trading days, it has slipped from 90 to 91 against the US dollar. In the last five sessions alone, the local currency has lost about 1 per cent against the greenback.

At around 11.45 am, the rupee was trading at 91.14 against the dollar, down 36 paise from its previous close. In the interbank foreign exchange market, it opened at 90.87 and continued to weaken as trading progressed. On Monday, the rupee had already closed at a fresh all-time low of 90.78, registering a loss of 29 paise.

Market participants pointed to lingering uncertainty over the India–US trade deal as a key factor behind the pressure on the rupee. Anil Kumar Bhansali, Head of Treasury and Executive Director at Finrex Treasury Advisors LLP, said mixed signals on the proposed agreement have clouded any recovery in the USD/INR pair, with dollar buying seen on a daily basis. He added that even a reduction in the trade deficit failed to support the rupee as foreign institutional investors continued to pull out funds.

According to exchange data, foreign institutional investors sold equities worth 1,468.32 crore on Monday, adding to the pressure on the domestic currency.

Meanwhile, government data showed that wholesale price inflation remained negative for the second consecutive month in November at (-) 0.32 per cent. This was despite a month-on-month increase in prices of food items such as pulses and vegetables. Wholesale inflation stood at (-) 1.21 per cent in October, compared to 2.16 per cent in November last year.

In global markets, the dollar index, which measures the strength of the US currency against six major currencies, was marginally lower by 0.03 per cent at 98.27. Brent crude, the global oil benchmark, declined by 0.61 per cent to 60.19 dollars per barrel in futures trade.

Domestic equity markets also traded in the red. The 30-share Sensex fell 363.92 points to 84,849.44 in early trade, while the Nifty declined by 106.65 points to 25,920.65, reflecting weak investor sentiment.