Rupee slides to a fresh all-time low at 84.42 against the dollar

The Indian rupee fell to an all-time low of 84.42 against the U.S. dollar on Tuesday, driven by sustained demand for the greenback from foreign banks and importers. The decline surpassed the previous record low of 84.4125 reached last week. The currency eventually closed at 84.4150, marking a marginal loss for the day.  

Pressure from domestic oil corporations and importers seeking dollars was a key factor behind the rupee's decline. Additionally, foreign banks' dollar demand added to the downward momentum. Despite the sharp depreciation, intervention by the Reserve Bank of India (RBI) helped curb further losses, as state-run banks were spotted offering dollars in the market intermittently.  

Global Currency Trends

The broader market backdrop also weighed on the rupee. The dollar index, a measure of the U.S. currency's strength against a basket of major currencies, was up 0.2 per cent at 106.4, adding pressure on emerging market currencies. While some Asian currencies, such as the Malaysian ringgit, saw gains, others, including the offshore Chinese yuan, slipped during the session.  

Traders noted that the RBI's consistent presence in the market has limited the rupee's volatility. However, the currency remains under pressure due to a combination of strong dollar demand and global factors, including higher U.S. interest rates and subdued risk sentiment.  

Further depreciation may depend on the balance of dollar demand-supply dynamics and the RBI's willingness to intervene in the forex market. For now, market participants anticipate the rupee trading near its current lows, with interventions likely keeping sharper declines in check.