Rupee slumps 11 paise to all-time low of 84.71 against US dollar

Rupee plunged 13 paise to close at a record low of 84.73 (provisional) against the US dollar on Monday. The depreciation was driven by disappointing macroeconomic data, persistent foreign fund outflows, and the strengthening of the US dollar in global markets.

Forex traders noted that Asian currencies were under pressure following President-elect Donald Trump's rhetoric on BRICs, which could further bolster the greenback. Trump’s threat of imposing a 100% tariff on BRIC nations if they undermine the US dollar added to the bearish sentiment.

Rupee opened at 84.59 and fell to an intra-day low of 84.73 before closing at the lowest level ever. On Friday, the currency had already slipped 13 paise to settle at 84.60, also a fresh all-time low.

The negative sentiment was further compounded by India’s manufacturing sector growth dipping to an 11-month low of 56.5 in November, amid inflationary pressures. The persistent outflow of foreign institutional investments (FIIs), which saw shares worth Rs 4,383.55 crore sold on Friday, also contributed to the rupee's decline.

Analysts expect the rupee to trade with a negative bias, anticipating continued dollar strength and further FII outflows. A recovery in crude oil prices may also weigh on the rupee, while positive domestic equity market movements could provide some support at lower levels. The USD-INR is expected to fluctuate within a range of Rs 84.50 to Rs 84.95.

At the global front, the dollar index rose by 0.51 per cent to 106.27, reflecting the greenback's overall strength. Meanwhile, Brent crude surged 0.99 per cent to USD 72.59 per barrel. India’s forex reserves fell by USD 1.31 billion to USD 656.582 billion for the week ending November 22, highlighting continued pressure on the currency.