The rupee traded in a tight band and slipped 7 paise to close at a record low of 88.79 (provisional) against the U.S. dollar on Monday, weighed down by foreign capital outflows and risk-off sentiment.
Traders said the local currency remains under pressure amid concerns over global trade, the U.S. visa fee hike impacting Indian IT exports, and rising crude prices. The RBI’s upcoming policy decision on October 1 is also seen as a key driver for both rupee and bond markets.
At the interbank forex market, the rupee opened at 88.69 and finally settled at 88.79, its lowest-ever close. On Friday, it had ended 4 paise higher at 88.72 after rebounding from a record low of 88.76 hit last Thursday.
“We expect the rupee to stay weak amid sluggish domestic markets and importer dollar demand. However, softness in the U.S. dollar and possible RBI intervention may cushion losses,” said Anuj Choudhary, Research Analyst, Mirae Asset Sharekhan. He added that investors will track U.S. home sales data, Donald Trump’s speech, and the RBI’s MPC outcome this week.
The six-member MPC, led by RBI Governor Sanjay Malhotra, began its three-day meet Monday. While most expect rates to remain unchanged, some analysts anticipate a 25 bps cut. The policy review comes amid global trade frictions, with the U.S. recently imposing 50% tariffs on Indian exports.
Meanwhile, the dollar index eased 0.19% to 97.96, and Brent crude futures dropped 1.37% to $69.17 per barrel. On equities, the Sensex slipped 61.52 points to 80,364.94, while Nifty shed 19.80 points to 24,634.90.
Foreign investors sold ₹5,687.58 crore worth of equities on Friday, exchange data showed. Separately, India’s forex reserves declined $396 million to $702.57 billion in the week ended September 19.
Adding to concerns, the U.S. announced a 100% tariff on branded and patented drugs from October 1, with exemptions only for firms building plants on American soil.
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