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The rupee depreciated 13 paise to close at an all-time low of 84.73 (provisional) against the U.S. dollar on Monday (December 2, 2024), on disappointing macroeconomic data and broad strength of the American currency in the overseas markets.
Forex traders said Asian currencies were down after Trump Rhetoric on BRICs currency, as the move may further strengthen the greenback.
President-elect Donald Trump on Saturday (November 30, 2024) threatened a 100% tariff on the BRIC bloc of nations if they act to undermine the U.S. dollar.
At the interbank foreign exchange, the rupee opened at 84.59 and touched the lowest level of 84.73 against the greenback during intra-day trade. The unit ended the session at an all-time low of 84.73 (provisional) against the dollar, registering a fall of 13 paise over its previous close.
On Friday (November 29, 2024), the rupee plunged 13 paise to settle at a fresh all-time low of 84.60 against the U.S. dollar.
Traders said disappointing macroeconomic data and persistent foreign fund outflows also dented investor sentiments.
India’s manufacturing sector growth fell to a joint 11-month low of 56.5 in November, restricted by competitive conditions and inflationary pressures amid a softer increase in factory orders, a monthly survey said on Monday.
“We expect the rupee to trade with a negative bias on strong dollar and FII outflows. A recovery in crude oil prices may also weigh on the rupee. Donald Trump’s tariff threat may further strengthen the greenback,” said Anuj Choudharyโ Research Analyst at Mirae Asset Sharekhan.
However, positive domestic markets may support the rupee at lower levels. Traders may take cues from U.S. ISM manufacturing PMI data, Choudhary said, adding that USD-INR spot price is expected to trade in a range of โน84.50 to โน84.95.
The dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading higher by 0.51% at 106.27.
Brent crude, the global oil benchmark, surged 0.99% to $72.59 per barrel in futures trade.
India’s forex reserves dropped $1.31 billion to $656.582 billion for the week ended November 22, the Reserve Bank of India (RBI) said on Friday.
The reserves had dropped a record $17.761 billion to USD $657.892 billion in the previous reporting week ending November 15.
On the domestic macroeconomic front, the latest government data released on Friday showed India’s economic growth slowed to near two-year low of 5.4% in the July-September period of this fiscal year due to poor performance of manufacturing and mining sectors as well as weak consumption.
On the domestic equity market front, the 30-share benchmark index Sensex closed 445.29 points, or 0.56% higher, at 80,248.08 points. The Nifty rose 144.95 points, or 0.6%, to 24,276.05 points.
Meanwhile, the central government’s fiscal deficit at the end of the first seven months of the current financial year touched 46.5% of the full-year target. The deficit stood at 45% of the Budget estimates in the corresponding period of 2023-24.
Traders said the persistent selling pressure by foreign funds added further strain on the currency. Foreign Institutional Investors (FIIs) were net sellers in the capital markets on Friday, as they offloaded shares worth โน4,383.55 crore, according to exchange data.
Published – December 02, 2024 04:19 pm IST
