Mumbai
USD/INR slipped by 13 paise to close at a fresh lifetime low of 96.83 against the US dollar on Wednesday, extending its losing streak to a ninth consecutive session amid elevated crude oil prices and global inflation concerns.
At the interbank foreign exchange market, the rupee opened at 96.89 against the dollar and touched an all-time low of 96.95 during the day before settling provisionally at 96.83. In the previous session, the domestic currency had plunged 50 paise to close at 96.70.
Analysts attributed the fall to a stronger US dollar, rising US Treasury yields and heightened risk aversion in global markets amid tensions in West Asia. According to Anuj Choudhary, Research Analyst at Mirae Asset Sharekhan, the rupee weakened as US 30-year Treasury yields climbed to a two-decade high while 10-year yields touched a 16-month peak, intensifying inflation fears and reducing expectations of interest rate cuts.
He said the rupee is likely to continue trading with a negative bias due to global market uncertainty, with the USD/INR pair expected to remain in the range of Rs 96.5 to Rs 97.10.
The sharp depreciation of the rupee has become a significant concern for policymakers, businesses and investors. Once regarded as one of Asia’s relatively stable currencies, the rupee has emerged among the worst-performing emerging market currencies this year due to rising oil prices, capital outflows, widening trade deficits and a strengthening dollar.
Meanwhile, the dollar index, which measures the greenback against a basket of six major currencies, was trading 0.09 per cent higher at 99.42.
Global oil benchmark Brent Crude was trading 2.77 per cent lower at USD 109.95 per barrel in futures trade.
In the domestic equity market, BSE Sensex rose 117.54 points to settle at 75,318.39, while NIFTY 50 gained 41 points to close at 23,659.
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Foreign Institutional Investors (FIIs) turned net sellers after three sessions of buying and sold equities worth Rs 2,457.49 crore on Tuesday, according to exchange data.
