Indian Rupee Hits Record Low Against US Dollar of 84.13
The Indian rupee hit an all-time low of 84.13 against the US dollar on Tuesday as foreign portfolio investors selling pressure on domestic stocks continued unabated. Although it briefly bounced back to 84.10 by the closing bell due to apparent intervention by the Reserve Bank of India the tremendous sell-off by foreign investors rages on. Today, the dollar index is at 103.70, which is down a bit.
The currency depreciation continued to hurt the Indian stocks with BSE Sensex falling 1,109 points (1.4%) to 78,614 and NSE Nifty declining 366 points (1.51%) to 23,938. The market received its largest monthly foreign investment selling in October as foreign institutional investors (FPIs) pulled out Rs 94,000 crore (about USD 11.2 billion) from Indian equities because of high domestic price levels and better investment opportunities in China.
The large-scale sell off has led to the extent of reduction in market capitalisation and BSE listed companies eroding Rs 8.44 lakh crore to take the market capitalisation to Rs 439.66 lakh crore. Asia forex traders expect that the rupee will be trading in a narrow range with most of the currency direction being influenced by the crude oil prices and the intervention of the RBI.
Anil Kumar Bhansali, the head of treasury at Finrex Treasury Advisors LLP has said, ‘The RBI has been so far fairly reactive in its dollar selling even as FPI outflows have persisted,’ The domestic currency began the day against the dollar at 84.07 levels and hardly moved throughout the day to touch a high of 84.05, up 1 paisa from its previous close.
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