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Rupee slide continues for 4th day, tumbles 28 paise against USD

·3-min read

Mumbai, Nov 12 (PTI) Extending its losing streak to the fourth straight session, the Indian rupee dived 28 paise to end at 74.64 against the US dollar on Thursday on sustained demand for the greenback from importers and banks coupled with foreign fund outflows.

The local unit opened at 74.44 against the greenback at the interbank forex market and witnessed an intra-day high of 74.38 and a low of 74.74 against the American currency.

It finally settled at 74.64 to the US dollar, down 28 paise over its last close of 74.36. In the last four sessions, the rupee has lost 56 paise against the American unit.

Forex traders said weak domestic equities too weighed on investor sentiment. Besides, market participants are awaiting cues from India's retail inflation and IIP numbers, scheduled to be released later in the day.

Jateen Trivedi, Senior Research Analyst (Commodity & Currency) at LKP Securities, 'Rupee extended losses by afternoon trade Thursday on likely outflow from local stock... and a strong dollar mainly on back of selling in financial sector losses about couple of percent on broad Indices. Dollar index has build some momentum in past 24 hours which has helped USDINR appreciate beyond 74.50.' The dollar index, which gauges the greenback's strength against a basket of six currencies, fell 0.23 per cent to 92.82.

Sriram Iyer, Senior Research Analyst at Reliance Securities, said, 'India today announced a host of measures to boost credit availability and employment as part of latest efforts to stimulate an economy battered by the coronavirus pandemic. We will have to wait and watch whether these measures help the economy or not.' Iyer said the 'the Indian rupee depreciated further against the US currency on persistent state-run banks' greenback bids, rumoured to be on behalf from the central bank and for defence-related payments'.

'The US dollar was steady this Thursday afternoon trade as COVID-19 vaccine optimism faded and a second wave of infections in the US and Europe is likely to dent the growth outlook in coming months,' Iyer noted.

On the domestic equity market front, the BSE Sensex ended 236.48 points or 0.54 per cent lower at 43,357.19; and the broader NSE Nifty slipped 58.35 points or 0.46 per cent to 12,690.80.

'Rupee fell sharply against the US dollar ahead of the important inflation and industrial production number that will be released later today. Increase inflation is likely to keep the rupee weighed down against the US dollar,' said Gaurang Somaiyaa, Forex & Bullion Analyst, Motilal Oswal Financial Services.

According to Devarsh Vakil, Deputy Head of Retail Research, HDFC Securities, 'Concerns are mounting on inflation front as well after recent surge in crude oil prices. High inflation will put pressure on Central bank to maintain interest rates higher. The weaker economic data and central bank's dollar buying has been weighing on rupee.' Vakil further said that 'USDINR pair has risen and now approaching its near-term resistance zone. We expect Rupee to halt its current deprecation spree tomorrow near the earlier highs of 74.8 mark'.

Brent crude futures, the global oil benchmark, rose 0.09 per cent to USD 43.84 per barrel. PTI DRR MKJ