Rupee hits new low, weighed down by month-end importer dollar bids

The rupee weakened to an all-time low on Monday, pressured by dollar demand from importers, including oil companies, even as most of its Asian peers logged gains.

The rupee declined to 83.73 to the dollar, slipping past the previous all-time low of 83.7275 hit on Friday.

The local currency hit record lows in four of the five trading sessions last week.

On Monday, strong dollar demand from local corporates, most likely related to month-end payment outflows, weighed on the currency, with traders expecting the rupee to continue seeing a gradual depreciation.

The weakness in the rupee comes even as India’s foreign exchange reserves hit a record high for the third straight week, having risen to $670.86 billion as of July 19, data from the Reserve Bank of India showed on Friday.

The reserve accretion signals that the RBI has been mopping up dollar inflows, while also “mildly intervening” to ensure that the rupee doesn’t see sharp declines, a senior trader at a foreign bank said.

The dollar index was down about 0.1% at 104.2, while Asian currencies were mostly higher by 0.1% to 0.8%.