The Indian rupee fell by 14 paise to close at a record low of 87.57 (provisional) against the US dollar on Thursday. This drop was attributed to the increasing likelihood of a rate cut by the Reserve Bank of India during its monetary policy meeting on Friday, putting pressure on the rupee.
Forex traders noted that the rupee hit fresh record lows due to weak domestic markets and a demand for dollars from importers. Additionally, global market uncertainty over US trade tariffs was expected to further weigh on the rupee.
Starting the day at 87.54, the rupee slid to an all-time intraday low of 87.60 against the US dollar before settling at 87.57 (provisional) by the end of the trading day. This marked a 14 paise decline from the previous close.
In the year so far, the rupee has fallen by over 2 percent. Compared to an exchange rate of 83.21 against the greenback on January 1, 2024, the rupee’s performance has been one of the weakest among Asian currencies.
Meanwhile, the dollar index, which measures the dollar’s strength against a basket of six currencies, was up by 0.40 percent at 108.00. Brent crude, the global oil benchmark, also rose by 0.52 percent to $75.00 per barrel in futures trade.
The weak PMI data signaled a slowdown in economic activity, with India’s services sector expanding at its slowest pace in over two years in January. The seasonally adjusted HSBC India Services PMI Business Activity Index fell from 59.3 in December to 56.5 in January, the lowest level since November 2022.
The Reserve Bank of India’s Monetary Policy Committee commenced its three-day meeting on Wednesday, with policy decisions set to be announced on February 7. In the equity market, the BSE Sensex was trading 213.12 points lower at 78,058.16 points, while the Nifty was down 92.95 points at 23,603.35 points.
Foreign institutional investors (FIIs) sold equities worth Rs 1,682.83 crore in the capital markets on a net basis on Wednesday, according to exchange data.
