The rupee plunged 26 paise to an all-time low of 90.75 against the US dollar in intra-day trade on Monday, weighed down by uncertainty over an India-US trade deal and persistent foreign fund outflows.
Forex traders said the rupee is expected to trade with a negative bias as the delay in the trade deal between India and the US dented investor sentiments.
Moreover, prevailing risk-averse market sentiment, compounded by strong US dollar demand from importers, further pressured the rupee.
At the interbank foreign exchange, the rupee opened at 90.53 against the US dollar, then lost ground and fell to a record intra-day low of 90.75, registering a 26-paise decline from its previous close.
On Friday, the rupee had slipped 17 paise to close at an all-time low of 90.49 against the American currency.
“The next support is at 90.80, after which we could see a crossover of 91 towards 92. RBI has clearly let the market determine the price and has been intervening only to control any excessive volatility,” said Anil Kumar Bhansali, Head of Treasury and Executive Director Finrex Treasury Advisors LLP.
India and the US concluded two days of talks on Thursday, during which both sides exchanged views on trade-related issues, including the ongoing negotiations for a mutually beneficial bilateral trade agreement.
Prime Minister Narendra Modi and US President Donald Trump on Thursday discussed ways to sustain momentum in the bilateral economic partnership in a phone conversation, amid signs that the two sides are inching closer to finalising a much-awaited trade deal.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.02 per cent lower at 98.37.
Brent crude, the global oil benchmark, was trading 0.41 per cent higher at $61.36 per barrel in futures trade.
On the domestic equity market front, the 30-share benchmark index, Sensex, was trading 51.77 points lower at 85,215.89, while the Nifty was down 31.30 points at 26,015.65.
Foreign Institutional Investors sold equities worth ₹1,114.22 crore on Friday, according to exchange data.
Meanwhile, India’s forex reserves jumped by $1.033 billion to $687.26 billion during the week ended December 5, the RBI said on Friday. In the previous reporting week, India’s forex reserves had dropped by $1.877 billion to $686.227 billion.
