The rupee slumped 36 paise in intra-day trade on Tuesday to breach the 91-mark against the US dollar for the first time. It was trading at 91.14 against the US dollar at 11.45 a.m., weighed down by uncertainty over the India-US trade deal and persistent FII outflows. It settled at 91.01 (provisional), despite a weaker greenback and a sharp decline in global crude oil prices.
The domestic unit has fallen from 90 a dollar to 91 in the last 10 trading sessions, slipping 1 per cent against the greenback in the past five sessions alone.
At the interbank foreign exchange, the rupee opened at 90.87 against the greenback and kept losing ground as the session progressed.
On Monday, it had settled at a new all-time low of 90.78 against the US dollar after registering a loss of 29 paise over its previous close. It traded on Tuesday in the range of 90.76 to 91.14 before settling at 91.01 (provisional), down 23 paise from its previous close.
Also Read: Rupee slumps to new low of 90.74
Meanwhile, FIIs sold equities worth ₹1,468.32 crore on Monday, according to exchange data.
Anil Kumar Bhansali, Head of Treasury and Executive Director, Finrex Treasury Advisors LLP, said there is dollar-buying happening every day, with the FII outflows continuing despite government data showing a reduction in trade deficit by 61 per cent despite the US tariffs.
“The US-India trade deal still seems to be off by a distance with the Commerce Secretary saying the first phase will be signed before the end of the year and news that we are closest to the deal being signed. The uncertainty has clouded the recovery on the USD/INR pair... with dollar buying happening every day,” he said.
The government’s data released on Monday also showed wholesale price inflation stayed in the negative for the second consecutive month in November at (-) 0.32 per cent, even though there was an uptick in prices of food articles like pulses and vegetables on a month-on-month basis.
Wholesale Price Index (WPI)-based inflation was at (-) 1.21 per cent in October and 2.16 per cent in November last year.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.03 per cent lower at 98.27.
Brent crude, the global oil benchmark, was trading 0.61 per cent lower at USD 60.19 per barrel in futures trade.
On the domestic equity market front, the 30-share benchmark index, Sensex, tanked 533.50 points to settle at 84,679.86, while the Nifty was down 167.20 points to 25,860.10.
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