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The rupee opened at 85.10 at the interbank foreign exchange and slipped further during intraday trade, touching an all-time low of 85.21 against the greenback
By the close, it had settled at 85.20, marking a 9-paise loss from its previous close. On Monday, the rupee had ended 7 paise lower at 85.11.
According to analysts, demand for the dollar surged due to month-end payment obligations, bolstered by fears of aggressive import tariffs by the US administration. Meanwhile, a hawkish stance by the US Federal Reserve, combined with strong US economic data, supported the greenback, PTI reported.
The dollar index, which measures the currency’s performance against six major currencies, rose by 0.11% to 107.93, buoyed by climbing US Treasury yields and concerns over delayed rate cuts.
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Crude oil prices added to the rupee’s woes, with Brent crude rising 0.69 per cent to $73.13 per barrel in futures trade.
In domestic markets, the 30-share BSE Sensex fell by 67.30 points, or 0.09%, to close at 78,472.87. Similarly, the NSE Nifty dropped 25.80 points, or 0.11%, ending the day at 23,727.65.
Experts predict that the rupee may face further pressure if the Federal Reserve maintains its hawkish tone, while surging crude oil prices and subdued domestic sentiment could exacerbate the decline.
The Reserve Bank of India’s intervention, likely via dollar sales, again helped limit the rupee’s losses, traders said.
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However, the “RBI doesn’t seem to defending any level right now but is just curbing volatility, which signals steady rupee depreciation will continue,” a trader at a state-run bank said, Reuters reported.
(With Agency Inputs)
