Rupee hits historic low of 84.11 against US dollar amid investor concerns

The rupee on Nov 4 fell 4 paise to a record low of 84.11 (provisional) against the US dollar, tracking a weak trend in domestic equities and relentless foreign capital outflows.

Forex traders said the Indian rupee touched new all-time lows weighed down by negative domestic markets which fell nearly 1.18%. A recovery in crude oil prices and FII outflows also dented investor sentiments.

However, the softening of the US dollar prevented a sharp fall.

At the interbank foreign exchange, the rupee opened at 84.07 against the US dollar. During the session, the local currency oscillated between a high of 84.06 and a low of 84.12. It finally settled at its all-time low of 84.11 (provisional), a loss of 4 paise from its previous close.

On Oct 31, the rupee edged up 1 paisa to 84.07 against the US dollar.

The forex market remained closed on Nov 2 on account of Diwali.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was down 0.52% to 103.73 points.

US dollar declined on disappointing non-farm payrolls report and ISM manufacturing PMI data from the US on Friday. The US added only 12,000 jobs in October 2024 versus forecast of 106,000 jobs while ISM manufacturing PMI fell to 46.5 in October, falling short of expectations of 47.6, Anuj Choudhary, Research Analyst at Sharekhan by BNP Paribas, said.

Brent crude, the international benchmark, surged 2.63% to USD 75.02 per barrel in futures trade.

"We expect the rupee to trade with a negative bias on weak domestic markets and sustained FII outflows. However, softening of US dollar amid disappointing jobs markets may support the rupee at lower levels. Traders may take cues from factory orders data from the US today and FOMC meeting outcome later this week," Choudhary said.

"USDINR spot price is expected to trade in a range of 83.95-84.30," Choudhary added.

In the domestic equity market, the 30-share BSE Sensex was down 941.88 points, or 1.18%, to close at 78,782.24, while Nifty declined 309 points, or 1.27%, to settle at 23,995.35.

Foreign institutional investors (FIIs) were net sellers in the capital markets on Nov 2, as they offloaded shares worth ₹211.93 crore, according to exchange data.

Meanwhile, India's forex reserves dropped USD 3.463 billion to USD 684.805 billion in the week ended October 25, the Reserve Bank of India said on Nov 2.

The overall reserves had dropped USD 2.163 billion to USD 688.267 billion in the previous reporting week. In end-September, the reserves had hit an all-time high of USD 704.885 billion.

(PTI)