Rupee falls to a new low, crosses 90-mark against US dollar
Stalled India-US trade talks and heavy FPI outflows continue to weigh on the rupee despite the weakening of the dollar index
The rupee opened at an all-time low and crossed the 90-mark against the US dollar on December 3 on persistent equity outflows and uncertainty around the India-US trade deal, currency experts said.
The rupee opened at 89.96 against the dollar and slipped to 90.1325 soon after. It ended the previous session at 89.87.
"USD/INR is expected to trade between 88.90 and 90.20. The 88.80–89.00 band continues to act as a firm support zone. A clean break below 89 would be the first real sign that the rupee is finally ready to pull back and gather strength," said Amit Pabari, managing director at CR Forex Advisors.
Stalled India-US trade talks and heavy FPI outflows are causing this fall despite the weakening of the dollar index, a currency expert said.
"If the RBI support eases at 90, then we could see 91 also in this cycle," said Anil Bhansali, head of treasury at Finrex Treasury Advisors.
The Reserve Bank of India’s monetary policy committee begins it meeting later in the day, with the interest rate decision to be announced on December 5. The meeting comes days ahead of the US Federal Reserve decision expected on December 10.
A rate cut by RBI could lead to further selling, but a weakened currency makes the MPC task difficult, Bhansali said.
