Rupee breaches 84 mark against US dollar as FPIs pull out of equities
Source: Business Standard
Repeated interventions by the Reserve Bank of India (RBI) over the last two months had helped the rupee hold above the key level of 84 per dollar | (Photo: Shutterstock)
The rupee breached the 84 mark against the US dollar to witness a new low again as foreign portfolio investors sold domestic equities and Brent crude oil prices rose due to continued tension in West Asia, said dealers.
The domestic currency was trading at Rs 83.05 per dollar at 1200 IST.
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The US CPI data came higher than expected which weighed on the sentiments on the foreign exchange traders. The CPI came at 2.4 per cent against an expectation of 2.3 per cent. However, the data was lowest since September 2021 which kept the US yields and dollar index steady. The dollar index measures the strength of the dollar against a basket of six major currencies.
“The real surprise for the markets was the uptick in core consumer price inflation, which edged up to 3.3 per cent from the three-year low of 3.2 per cent recorded in the previous two months,” said Amit Pabari, managing director at CR Forex.
The expectation of a 50 basis points rate cut by the US Federal Reserve in December was dented post the release of the data.
The RBI continued to intervene in the foreign exchange market via dollar sales to protect the rupee from further depreciation.
“The Rupee made a new low as foreign investors continue buying the dollar while the RBI sells dollars,” said Anil Kumar Bhansali, Head of Treasury and Executive Director at Finrex Treasury Advisors LLP.
Brent Crude climbed to $79.18 per barrel, marking its second consecutive weekly gain. The increase was fueled by heightened supply risks from the ongoing war and concerns about potential strikes on Iran’s oil facilities. Additional upward pressure came from disruptions caused by Hurricane Milton, as well as China’s pro-growth measures, which bolstered the demand outlook.
“The RBI is there in the market, we see rupee trading in the range of Rs 82.90 per dollar to Rs 83.15 per dollar today (October 11),” said a dealer at a state-owned bank.
First Published: Oct 11 2024 | 12:28 PM IST
