The rupee depreciated by 10 paise and settled for the day at an all-time low of 83.14 (provisional) against the US dollar on Wednesday, weighed down by a surge in crude oil prices and strong American currency.
Forex traders said the Indian rupee depreciated on Wednesday as the US dollar rose to the highest levels in six months. Moreover, elevated crude oil prices also weighed on rupee.
At the interbank foreign exchange market, the local unit opened at 83.08 against the US dollar and moved in a range of 83.02 to 83.18 in the day trade.
The rupee finally settled at 83.14 (provisional) against the US dollar, down 10 paise from its previous close.
The India currency earlier hit the lowest level of 83.13 on August 21 this year.
On Tuesday, the rupee plunged by 33 paise to close at 83.04 against the US dollar.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, fell marginally by 0.07 per cent to 104.73.
Brent crude futures, the global oil benchmark, declined 0.67 per cent to USD 89.44 per barrel.
“Brent crude breached the USD 90/barrel mark. US dollar gained on safe-haven demand amid concerns over global economic slowdown after China’s Caixin Services PMI fell to an 8-month low at 51.8 in August vs forecast of 53.6,” said Anuj Choudhary – Research Analyst at Sharekhan by BNP Paribas.
Choudhary further said that “we expect the rupee to trade with a negative bias on risk aversion in global markets and a strong US dollar.
“FII outflows and rising crude oil prices may further pressurise rupee. However, any intervention by the RBI and expectations of a no rate hike by Fed in its September FOMC may support rupee at lower levels. Traders may take cues from ISM services PMI data from the US.”
On the domestic equity market front, the 30-share BSE Sensex closed 100.26 points or 0.15 per cent higher at 65,880.52. The broader NSE Nifty advanced 36.15 points or 0.18 per cent to 19,611.05.
Foreign Institutional Investors (FIIs) were net sellers in the capital markets on Tuesday as they offloaded shares worth ₹1,725.11 crore, according to exchange data.