New Delhi, Dec 4: The rupee tumbled to a fresh all-time low of 90.43 against the US dollar on Thursday, down 28 paise in early trade, as foreign institutional investor (FII) outflows continued and the Reserve Bank of India (RBI) maintained a restrained stance ahead of its key policy review.
At the interbank foreign exchange market, the currency opened at 90.36 and slipped further in initial deals. On Wednesday, it had breached the 90-a-dollar mark for the first time, closing at 90.15.
Anil Kumar Bhansali, Head of Treasury at Finrex Treasury Advisors LLP, noted, “It seems that until the trade deal comes, we may see the rupee weaken further, and it may reach the levels of 91.00 soon. With a weak rupee, we do not expect the RBI to cut rates on Friday.”
Chief Economic Adviser V Anantha Nageswaran said the currency drop was not affecting inflation or exports. “A falling rupee helps outward shipment but makes imports costlier. Import-dependent sectors such as gems and jewellery, petroleum, and electronics may see lower benefits due to a rise in input costs,” he said.
The dollar index, which measures the greenback against a basket of six currencies, was up 0.14% at 98.99, while Brent crude rose 0.49% to USD 62.98 per barrel in futures trade.
Despite strong macroeconomic signals, including a GDP growth surprise and HSBC India Services PMI rising to 59.8 in November, traders remain cautious. Amit Pabari, MD of CR Forex Advisors, said, “The currency market isn’t trading on growth headlines anymore. It wants stability, clear policy guidance… and maybe a trade deal that doesn’t keep slipping away. Now all eyes turn to RBI Governor Sanjay Malhotra on December 5. Investors aren’t just listening to rate decisions. They want to hear his voice on the rupee.”
In domestic equities, the Sensex rose 45.99 points to 85,152.80, while Nifty gained 14.35 points to 26,000.35. FIIs sold equities worth Rs 3,206.92 crore on Wednesday.
