The rupee settled at 85.64 against the US dollar on Wednesday (January 1), unchanged from its previous close, marking its seventh consecutive session at record closing lows. Weighed down by dollar bids from importers and subdued foreign inflows, the currency remains under pressure, PTI reported.
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The rupee traded within a narrow range, opening at 85.63 and touching an intraday low of 85.72 during the session. It remains vulnerable to further weakness as traders expect it to trade between 85.20 and 85.80 in the near term.
“The rupee is still susceptible to downward pressure, given strong dollar bids and robust US yields,” said Anil Kumar Bhansali, Head of Treasury at Finrex Treasury Advisors LLP.
According to Reuters, the depreciation bias is driven by a combination of factors, including the dollar index maintaining its strength near 108.48 and persistent concerns over slowing domestic growth and a widening trade deficit.
Foreign institutional investors (FIIs) offloaded ₹4,645.22 crore in the capital markets on Tuesday (December 1), compounding the pressure on the local unit. While FIIs logged only $124 million of net equity purchases in 2024, significantly down from $20.7 billion in 2023, inflows into bonds soared to record highs last year. However, experts predict a decline in bond inflows in 2025, citing central bank interest rate trajectories in India and the US as key factors.
Brent crude prices stood at $74.64 per barrel, while domestic equities ended higher, with the Sensex gaining 0.47% to close at 78,507.41, and the Nifty rising 0.41% to settle at 23,742.90.
Also read: India’s fiscal deficit for April-November at ₹8.47 lakh crore, 52.5% of FY25 target
Meanwhile, the Centre’s fiscal deficit reached ₹8.47 lakh crore during April-November, accounting for 52.5% of the full-year target, according to the Controller General of Accounts (CGA).
(With agency inputs)
(Edited by : Shoma Bhattacharjee)
