The Indian rupee fell to a new all-time low, slipping 4 paise to 84.11 (provisional) against the US dollar on Monday. This drop was driven by weak domestic market trends and ongoing foreign capital outflows, forex traders reported. Domestic equities saw a sharp decline of 1.18%, while a rebound in crude oil prices and continued foreign institutional investor (FII) outflows further dampened sentiment.
Despite these pressures, the US dollar’s own softening due to disappointing economic data mitigated a steeper fall in the rupee. The rupee began trading at 84.07 against the US dollar and fluctuated between a high of 84.06 and a low of 84.12 before closing at 84.11, marking a loss of 4 paise from its previous close.
Last Thursday, the rupee saw a slight increase, rising by 1 paisa to 84.07 against the dollar. Markets were closed on Friday for Diwali celebrations. The dollar index, which measures the greenback against six major currencies, dipped by 0.52% to 103.73, impacted by disappointing US job and manufacturing data. The US added only 12,000 jobs in October 2024, far below the forecasted 106,000, and the ISM manufacturing PMI fell to 46.5 against an expected 47.6, noted Sharekhan by BNP Paribas Research Analyst Anuj Choudhary.
Meanwhile, Brent crude saw a 2.63% increase, trading at USD 75.02 per barrel. Choudhary expects the rupee to trade with a negative outlook, influenced by weak domestic markets and FII outflows, though the softer US dollar may provide some support. Traders will closely watch US factory orders and the Federal Open Market Committee (FOMC) meeting outcome this week, with the USD/INR range anticipated between 83.95 and 84.30.
In the domestic market, the BSE Sensex dropped by 941.88 points, closing at 78,782.24, while the Nifty fell by 309 points to settle at 23,995.35. FIIs were net sellers on Friday, with share sales totaling Rs 211.93 crore, per exchange data.
India’s foreign exchange reserves also declined, falling by USD 3.463 billion to USD 684.805 billion as of October 25, following a USD 2.163 billion drop in the previous week. The reserves had reached a peak of USD 704.885 billion in late September.
