Rupee Slips Past 91-Mark Against US Dollar in Intra-Day Trade.
The rupee breaches 91 against the dollar for the first time in intra-day trade on Tuesday, hitting a historic low amid sustained FII outflows and uncertainty over the India–US trade deal. As the rupee breaches 91 against the dollar, analysts warn that continued capital outflows and weak sentiment could keep the currency under pressure.
Sharp Decline Seen Over Recent Trading Sessions
Over the last 10 trading sessions, the rupee has depreciated from 90 to 91 per dollar, highlighting a steady downward trend. In just the past five sessions, the currency has slipped nearly 1 per cent against the greenback. At 11:45 am, the rupee traded at 91.14, down 36 paise from its previous close.
Interbank Market Shows Continued Weakness
At the interbank foreign exchange market, the rupee opened at 90.87 against the US dollar. However, selling pressure intensified as the session progressed, pushing the currency lower. On Monday, the rupee had already settled at a record low of 90.78, marking a loss of 29 paise over its previous close.
Trade Deal Uncertainty Weighs on Rupee
Market experts pointed to uncertainty over the India–US trade agreement as a major factor dragging the rupee lower. Anil Kumar Bhansali, Head of Treasury and Executive Director at Finrex Treasury Advisors LLP, said that unclear timelines around the trade deal have clouded any recovery in the USD/INR pair. He added that consistent dollar buying continues to pressure the rupee.
FII Outflows Continue to Hurt Currency Sentiment
Despite a reported reduction in the trade deficit, the rupee failed to recover due to persistent Foreign Institutional Investor (FII) outflows. According to exchange data, FIIs sold equities worth ₹1,468.32 crore on Monday. Continuous capital outflows have weakened investor confidence and added stress to the currency market.
Inflation Data Fails to Provide Support
Meanwhile, wholesale price inflation remained in the negative zone for the second consecutive month in November at (-) 0.32 per cent, government data showed. Although prices of food items like pulses and vegetables rose month-on-month, the overall WPI failed to support the rupee. WPI inflation stood at (-) 1.21 per cent in October and 2.16 per cent in November last year.
Global Cues and Equity Markets Add Pressure
Globally, the dollar index edged 0.03 per cent lower to 98.27, while Brent crude declined 0.61 per cent to USD 60.19 per barrel. However, domestic equity markets remained weak, with the Sensex falling 363.92 points to 84,849.44 and the Nifty declining 106.65 points to 25,920.65, further weighing on the rupee.
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