Mumbai, Sep 1 (PTI) The rupee depreciated just 1 paisa to close at an all-time low of 88.10 against the US dollar on Monday amid Indo-US trade deal uncertainties and higher dollar demand from importers.
Forex traders said the rupee opened on a weaker note this morning and revisited its all-time intra-day low of 88.33 against the American currency, weighed down by persistent foreign fund outflows.
At the interbank foreign exchange market, the rupee opened at 88.18 against the US dollar, then lost ground and fell to an all-time intra-day low of 88.33, as additional trade tariffs on India by the US raised concerns over India’s trade deficit.
The domestic unit finally settled at an all-time closing low of 88.10 against the greenback, registering a fall of just 1 paisa over its previous close.
On Friday, the rupee breached the 88 per US dollar mark for the first time and closed at an all-time low of 88.09. During intra-day trade, it had touched an all-time intra-day low of 88.33.
The rupee recovered from an all-time intraday low on Monday due to the strength in domestic markets, Anuj Chaudhary, Research Analyst, Currency and Commodities, Mirae Asset ShareKhan.
On the domestic equity market front, Sensex jumped 554.84 points to settle at 80,364.49, while Nifty surged 198.20 points to 24,625.05.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, fell 0.14 per cent to 97.63, supporting the rupee at lower levels.
The dollar may weaken further, raising the odds of a rate cut by the US Fed in September. Investors may remain cautious ahead of the non-farm payrolls report from the US this week. USD/INR spot price is expected to trade in a range of 87.85 to 88.50, Chaudhary added.
“We expect the rupee to trade with a slight negative bias amid the ongoing trade tariff concerns on India by the US. FII outflows and gains in crude oil prices may also pressurise the rupee,” Chaudhary said.
Brent crude, the global oil benchmark, was trading 0.99 per cent higher to USD 68.15 per barrel in futures trade.
Foreign Institutional Investors offloaded equities worth Rs 1,429.71 crore on Monday, according to exchange data.
The RBI on Friday said the country’s forex reserves dropped USD 4.386 billion to USD 690.72 billion during the week ended August 22. The overall reserves had jumped from USD 1.488 billion to USD 695.106 billion in the previous reporting week.
On the domestic macroeconomic front, the Indian manufacturing sector witnessed the fastest improvement in operating conditions in over 17 years in August, driven by increased production efficiency and healthy demand conditions, a monthly report said on Monday.
The seasonally adjusted HSBC India Manufacturing Purchasing Managers’ Index (PMI) rose from 59.1 in July to 59.3 in August. PTI DRR BAL BAL
