Rupee slumps 50 paise to settle at fresh record low of 94.03 against US dollar

The rupee breached the 94/dollar barrier for the first time, slumping 50 paise to a new record closing low of 94.03 (provisional) against the greenback on Monday, as spiralling global crude prices and unabated foreign fund outflows unnerved investors.

A strengthening US dollar and a steep decline in the domestic equity markets further weakened the local unit, forex traders said.

At the interbank foreign exchange, the local unit opened at 93.84 and kept losing ground throughout the day, before breaching the 94-mark against the US dollar for the first time to settle at 94.03 (provisional), down 50 paise from its previous close.

The rupee went past the 93-mark against the greenback on Friday after crashing 64 paise to settle at 93.53.

“The rupee hit fresh all-time lows on Friday and breached the 94-mark for the first time amid escalating geopolitical tensions in West Asia and weak domestic markets. Surge in crude oil prices and FII outflows, too, weighed on the rupee,” Anuj Choudhary, Research Analyst, Mirae Asset ShareKhan, said.

“We expect the rupee to trade with a negative bias as deteriorating global sentiments and geopolitical tensions may keep the rupee under pressure. However, time-to-time intervention by the Reserve Bank may support the rupee at lower levels,” he said, adding that the USD-INR spot price is expected to trade in a range of Rs 93.60-94.40.

The dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.14 per cent higher at 99.78.

Brent crude, the global oil benchmark, was trading 1.11 per cent lower at USD 113.4 per barrel in futures trade.

On the domestic equity market front, the Sensex crashed 1,836.57 points, or 2.46 per cent, to 72,696.39, while Nifty slumped 484.30 points, or 2.10 per cent, to 22,630.20.

Foreign institutional investors sold equities worth Rs 5,518.39 crore on a net basis on Friday, according to exchange data.

Meanwhile, India’s forex reserves dropped USD 7.052 billion to USD 709.759 billion during the week ended March 13, the RBI said on Friday.