Mumbai

The Indian rupee weakened further on Wednesday, ending at a record low of 94.05 (provisional) against the US dollar, pressured by sustained foreign fund outflows and ongoing geopolitical tensions in West Asia.

Despite supportive factors such as easing crude oil prices, a softer US dollar, and strong gains in domestic equity markets, the local currency failed to recover, according to forex market participants.

In the interbank foreign exchange market, the rupee opened at 93.94 and moved within a band of 93.86 to 94.08 during the session before settling at its weakest-ever closing level, marking a decline of 29 paise from the previous close. On Tuesday, it had already fallen 23 paise to finish at 93.76 against the greenback.

Analysts noted that even as global markets showed a risk-on sentiment, demand for the US dollar remained firm, particularly due to month-end requirements, keeping pressure on the rupee. Expectations of a possible easing in tensions between the US-Israel bloc and Iran had supported other risk assets, but the rupee continued to face selling pressure.

Market experts believe the Reserve Bank of India may step in to prevent excessive depreciation, with projections suggesting the currency could move within a range of around 93.25 to 94.25 in the near term.

Meanwhile, the dollar index, which measures the US currency against a basket of major global currencies, was trading slightly lower at 99.26.

Crude oil prices also declined, with Brent crude hovering below the USD 100 per barrel mark in futures trade.

On the domestic front, equity benchmarks posted strong gains, with the BSE Sensex rising 1,205 points to 75,273.45, while the NSE Nifty advanced 394.05 points to close at 23,306.45.

READ MORE: AdvocateTuba Snowbar is unapologetic, unstoppable

Foreign institutional investors remained net sellers, offloading equities worth Rs 8,009.56 crore in the previous session, as per exchange data.