In morning trade on Tuesday, the rupee continued to struggle, maintaining its position at the preceding day's record low of 83.34 against the US dollar by 11:28 a.m., despite the weakening of the dollar index, which dropped to 103.20, marking its lowest point in two-and-a-half months.
Surprisingly, the rupee didn't witness the anticipated gains, which traders attributed to increased dollar purchases by importers, particularly oil companies, aiming to hedge their positions amidst the favorable low dollar price.
While several Asian currencies experienced growth owing to the declining US dollar, the rupee remained stagnant in its position against the dollar.
The rupee faced a downturn on Monday, slipping by 7 paise to settle at 83.34 against the US dollar, influenced by rising crude oil prices and the outflow of foreign funds from stock markets. Brent crude futures, a global oil benchmark, ascended by 0.66 per cent to reach USD 81.14 per barrel on Monday. Simultaneously, both the Sensex and the Nifty recorded declines, with the Sensex dropping 139.58 points to 65,655.15 and the Nifty decreasing by 37.80 points to 19,694.
Foreign institutional investors (FIIs) emerged as net sellers in the capital markets on Friday, offloading shares worth Rs 477.76 crore, according to exchange data.
The country's foreign exchange reserves, based on the latest RBI data released on Friday, witnessed a decline of USD 462 million, reaching USD 590.321 billion by the week ending November 10. A reduction in forex reserves limits the RBI's capacity to intervene and support a depreciating rupee.
Previously, on November 13 this year, the rupee had touched its earlier record low of 83.33 against the dollar before settling at 83.26 on Friday. The RBI has intermittently intervened by selling dollars when the rupee undergoes significant depreciation, maintaining the rupee's movement within a restricted range.
(With Agency Inputs)
