Rupee Closes At Historic Low Amidst Market Jitters
The local currency weakened nine paise to close at Rs 83.54 against the dollar.
The Indian rupee recorded its lowest-ever closing level against the US dollar on Tuesday amid the heightened tensions in the Middle East and the greenback's strength weighing on the sentiment.
The local currency weakened nine paise to close at Rs 83.54 against the greeenback. Intraday, the rupee hit an all-time low of Rs 83.555. It had closed at Rs 83.45 a dollar on Monday, according to Bloomberg data.
It breached its previous intra-day low of Rs 83.50 on Nov. 10, 2023.
Global Headwinds
The Bloomberg Dollar Spot Index has risen for the fifth consecutive session, indicating a decline in Asian currencies and widespread losses in stock markets.
The MSCI EM Currency index has reached a new low for 2024, with the Australian and New Zealand dollars among the top G-10 currencies experiencing declines.
The South Korean won dropped 1.15%, and the Indonesian rupiah has depreciated past 16,000 per dollar for the first time since 2020.
"Need to watch what RBI does to counter the rupee depreciation," Anil Bhansali, head of treasury and executive director at Finrex Treasury Advisors said.
"March US Retail Sales exceeded forecasts, bolstering bond yields and the USD. Investors' concern that Middle East conflict might escalate provides additional support to the safe-haven USD. For USDINR, 83.40 acts as a support while 83.70 a resistance," Kunal Sodhani, vice president of Shinhan Bank, said.
With global uncertainties stabilising, fundamental economic factors are expected to have a greater impact on the currency, according to Amit Pabari, managing director at CR Forex.