The rupee recovered from its record low, closing at 89.96 against the US dollar after a softer dollar index and reported
RBI intervention. Despite initial weakness due to foreign selling and trade deal delays, the currency found support.
Analysts anticipate continued pressure from outflows but potential cushioning from a subdued dollar and possible RBI
The rupee pulled back from its weakest-ever level on Thursday, ending the day at 89.96 against the US dollar, a gain of
19 paise, as a softer dollar index and reports of the Reserve Bank of India’s intervention helped steady the currency.
Traders said the US dollar lost ground after ADP non-farm payroll numbers came in far below expectations, providing some
support to the rupee after a volatile start, as per news agency PTI.
Priyanka Gandhi Slams Modi Govt On Rupee Crash While Piyush Goyal Defends India’s Economic Strength
The currency had opened on the back foot at 90.36, weighed down by persistent foreign investor selling, firmer crude oil
and delays in announcing the India–US trade deal. It then slipped further to a new all-time low of 90.43 before
recovering later. This came a day after the rupee breached the 90-per-dollar mark for the first time, closing at 90.15
on Wednesday. As per PTI, chief economic adviser V Anantha Nageswaran said on Wednesday that the rupee’s fall was not
feeding into higher inflation or hurting exports, though he noted that weaker currency levels can lift outward shipments
while pushing up the cost of imports. Import-heavy sectors such as electronics, petroleum, and gems and jewellery may
feel the strain of higher input costs, he added. Traders said the currency continues to face pressure from foreign fund
outflows and uncertainty surrounding the stalled trade negotiations with the United States. On Wednesday, foreign
institutional investors sold Rs 3,206.92 crore worth of equities, according to exchange data. Market participants also
flagged elevated crude prices as a headwind. Brent crude was last trading 0.22% higher at $62.81 per barrel in futures
trade. Meanwhile, the dollar index—which tracks the greenback against six major currencies—eased 0.01% to 98.84, helping
the rupee move off its lows. Anuj Choudhary of Mirae Asset ShareKhan said the rupee may “trade with a negative bias” due
to continued selling by FIIs and weakness in domestic markets. However, he added that a subdued dollar following
disappointing US jobs data and rising expectations of a December Federal Reserve rate cut could help cushion the
currency. “Any further intervention by the central bank may also support the rupee,” he said, projecting a USD–INR range
of 89.65 to 90.50. India’s GDP growth has surprised on the upside, and the HSBC India Services PMI climbed to 59.8 in
November on strong demand. Markets are now looking to the RBI’s monetary policy announcement on Friday, where Governor
Sanjay Malhotra’s rate-setting panel will weigh falling inflation, solid growth, a weaker rupee and global tensions.
Equity markets were firm on Thursday, with the Sensex rising 158.51 points to 85,265.32 and the Nifty up 47.75 points at
26,033.75. Trade on Wednesday showed how sharply the rupee has been moving. It had opened at 89.96, hit an intra-day
record low of 90.15, and recovered to 90.02 by early afternoon. Traders said nationalised banks were seen buying dollars
at higher levels, possibly on behalf of the RBI, while delays in India–US trade talks and heavy foreign outflows kept
the rupee under pressure, as per PTI.