The Indian rupee depreciated by 10 paise on Thursday (December 26), reaching a new all-time low of 85.25 against the US dollar in early trade.
The decline was driven by continued foreign capital outflows and heightened demand for the greenback at the month-end, according to forex traders.
Despite positive cues from domestic equity markets, the rupee struggled as the dollar index remained elevated, while crude oil prices edged higher, PTI reported.
At the interbank foreign exchange market, the rupee opened weaker at 85.23 and slid further to hit a historic low of 85.25 against the greenback. This marked a 10-paise decline from its previous close of 85.15.
Earlier this week on Tuesday, the rupee had slipped by 4 paise to close at a record low of 85.15 against the US dollar. The forex markets remained closed on Wednesday in observance of Christmas.
The dollar index, which measures the US dollar's strength against a basket of six major currencies, was marginally down by 0.11% at 107.90. However, it stayed at elevated levels, bolstered by rising US Treasury yields and concerns over the US Federal Reserve delaying interest rate cuts.
Meanwhile, Brent crude oil prices, a key indicator of global oil markets, gained 0.38% to reach $73.86 per barrel in futures trade, adding pressure on the rupee.
On the domestic front, equity markets showed resilience. The Sensex climbed 335.63 points (0.43%) to trade at 78,808.50, while the Nifty advanced 103.55 points (0.44%) to 23,831.20.
Despite the strength in equities, foreign institutional investors (FIIs) remained net sellers in the capital markets on Tuesday, offloading shares worth Rs 2,454.21 crore, according to exchange data.
The rupee's persistent depreciation underscores the challenges posed by global economic conditions, elevated crude prices, and sustained foreign capital outflows.
Analysts believe the near-term trajectory of the rupee will depend on the interplay of global dollar strength, crude oil prices, and FII activity in Indian markets.
The decline was driven by continued foreign capital outflows and heightened demand for the greenback at the month-end, according to forex traders.
Despite positive cues from domestic equity markets, the rupee struggled as the dollar index remained elevated, while crude oil prices edged higher, PTI reported.
At the interbank foreign exchange market, the rupee opened weaker at 85.23 and slid further to hit a historic low of 85.25 against the greenback. This marked a 10-paise decline from its previous close of 85.15.
Earlier this week on Tuesday, the rupee had slipped by 4 paise to close at a record low of 85.15 against the US dollar. The forex markets remained closed on Wednesday in observance of Christmas.
The dollar index, which measures the US dollar's strength against a basket of six major currencies, was marginally down by 0.11% at 107.90. However, it stayed at elevated levels, bolstered by rising US Treasury yields and concerns over the US Federal Reserve delaying interest rate cuts.
Meanwhile, Brent crude oil prices, a key indicator of global oil markets, gained 0.38% to reach $73.86 per barrel in futures trade, adding pressure on the rupee.
On the domestic front, equity markets showed resilience. The Sensex climbed 335.63 points (0.43%) to trade at 78,808.50, while the Nifty advanced 103.55 points (0.44%) to 23,831.20.
Despite the strength in equities, foreign institutional investors (FIIs) remained net sellers in the capital markets on Tuesday, offloading shares worth Rs 2,454.21 crore, according to exchange data.
The rupee's persistent depreciation underscores the challenges posed by global economic conditions, elevated crude prices, and sustained foreign capital outflows.
Analysts believe the near-term trajectory of the rupee will depend on the interplay of global dollar strength, crude oil prices, and FII activity in Indian markets.
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