Representative image of Indian Rupee and US Dollar.
Credit: iStock Image.
Forex traders said the sustained weakness in the rupee is primarily attributable to a widening trade deficit, the delayed India-US trade deal, and limited central bank intervention.
At the interbank foreign exchange market, the rupee opened at 89.45, then lost its ground and fell to a record low of 89.79 (provisional) against the US dollar in intraday trade, down 34 paise over its previous close.
The unit earlier logged its lifetime intraday low at 89.66 against the US dollar on November 21, when it had plunged 98 paise.
At the end of trade on Monday, the rupee settled at 89.53 (provisional) against the greenback, down eight paise over its previous close.
On Friday, the rupee dropped nine paise to settle at 89.45 against the US dollar.
"The outlook for the rupee to remain under pressure versus the US dollar for the coming days, as the underlying imbalance between demand and supply for the US dollar is likely to persist," said Dilip Parmar, Senior Research Analyst, HDFC Securities.
In the near term, spot USD-INR has resistance at 89.95 and support at 89.30, Parmar added.
Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading 0.17 per cent higher at 99.28.
Brent crude, the global oil benchmark, rose 1.86 per cent to USD 63.55 per barrel in futures trade.
On the domestic equity market front, both benchmark indices, Sensex and Nifty, declined from their record highs. Sensex dipped 64.77 points to settle at 85,641.90, while Nifty slipped 27.20 points to 26,175.75.
Foreign institutional investors sold equities worth Rs 3,795.72 crore on a net basis on Friday, according to exchange data.
On the domestic macroeconomic front, India's manufacturing sector activity eased to a nine-month low in November, mainly owing to a softer rise in sales and production amid reports of challenging market conditions.
The seasonally adjusted HSBC India Manufacturing Purchasing Managers' Index (PMI), falling to 56.6 in November from 59.2 in October, highlighted the slowest improvement in operating conditions since February.
Forex traders said investors are adopting a cautious stance amid ongoing trade tensions with the US, with expectations of a settlement towards the end of the year.
On November 28, Commerce Secretary Rajesh Agrawal said India is hopeful of reaching a framework trade deal with the US this year itself that should address the tariff issue to the benefit of Indian exporters.
Both countries have been in negotiations for a long time, and the first tranche of a bilateral trade deal was expected by the fall of 2025, but the Trump administration's imposition of tariffs on Indian exports has created hurdles.