Rupee hits all-time low of 84.38

The rupee depreciated to an all-time low of 84.38 per dollar on Friday due to demand for greenbacks from foreign portfolio investors, who have been selling in the Indian equity markets for the past one month or so, and oil companies.

Though on a positive note at 84.3225 per dollar against the previous close of 84.3775, the strength could not be sustained due to the aforementioned reasons. Intraday, the Indian unit touched an all-time low of 84.38 and closed barely changed at 84.3750.

Forex dealers said the RBI is maintaining a tight leash on the rupee’s movement by putting a small portion of its huge stockpile of forex reserves to good use – selling dollars.

They observed that one of the reasons why the reserves have come down below $700 billion in the last couple of weeks is due to the central bank’s intervention in the forex market. India’s forex reserves as on November 1, 2024, stood at $682.130 billion.

“The RBI seems to be allowing gradual depreciation of the Rupee. This is probably the best way to go about managing our currency in the face of a strengthening dollar and the likelihood of China depreciating its currency as US President-elect Donald Trump may impose high tariffs on imports from China once he takes office.

“So, the rupee has to align with yuan’s movement to ensure that our exports stay competitive,” said Karur Vysya Bank Treasury Head V Rama Chandra Reddy.

Meanwhile, the benchmark 10-year Government Security (7.10 per cent GS 2034) opened lower at 6.80 per cent yield tracking a fall in treasury yields overnight (following FOMC meeting outcome), Nuvama Wealth Management said in a report.

However, sharp moves in yields were limited, with some profit booking seen in the afternoon. Yield of the benchmark paper closed trade at 6.81 per cent vs previous close of 6.83 per cent.