The rupee dropped to a lifetime low against the US dollar on Friday, pressured by concerns over the recent jump in oil prices and the exodus of foreign money from the nation’s equity markets.
The rupee dropped to 83.9900 to the dollar, inching past the previous lifetime low of 83.9850 hit on September 12 and down from 83.9675 in the previous session.
The local currency had recovered to near 83.50 a little over two weeks ago.
“At these levels, there is almost always the known seller (of USD/INR)” in the market, the trader said, referring to the Reserve Bank of India’s ( RBI ) frequent market interventions.
The RBI was likely selling dollars near 83.98 levels on Friday, traders said.
Overseas investors have pulled out about $7.5 billion from Indian equities over the last nine trading sessions.
Oil prices have remained elevated amid concerns of a wider conflict in the Middle East and are up over 10 per cent in October so far.
Brent crude oil prices rose more than 3.5 per cent on Thursday and were last quoted at $79.1 per barrel.
India is largely reliant on imports for crude oil supplies and imported crude worth $139 billion in financial year 2023-24, according to government data.
Despite the challenges “the rupee’s downside appears limited, supported by the RBI ‘s sizable reserves,” Amit Pabari, managing director at FX advisory firm CR Forex, said.
India’s foreign exchange reserves rose to a record high of $704.9 billion as of Sept. 27, according to central bank data.
