Rupee slumps 38 paise to close at all-time low of 90.32 against US dollar

Mumbai: The rupee plunged 38 paise to close at an all-time low of 90.32 against the US dollar on Thursday amid uncertainty over the India-US trade deal.

Forex traders said the rupee is expected to trade with a negative bias as the delay in the trade deal between India and the US may continue to dent investor confidence.

Moreover, prevailing risk-averse market sentiment and sustained foreign fund outflows weighed on the local unit.

At the interbank foreign exchange, the rupee opened at 89.95 against the US dollar, then lost ground and fell to a record intra-day low of 90.48, registering a 54-paise decline from its previous close.

At the end of Thursday's trading session, the rupee was quoted at 90.32 against the American currency, down 38 paise over its last close.

On Wednesday, the rupee depreciated 7 paise to close at 89.94 against the US dollar.

Forex traders said the rupee fell to a new all-time low of 90.48 after Chief Economic Advisor V Anantha Nageswaran reportedly said the India-US trade deal is likely to be inked by March.

"Indian rupee hit a fresh all-time low amid uncertainty over the India-US trade deal. However, positive domestic markets and a weak US Dollar cushioned the downside," said Anuj Choudhary, Research Analyst, MiraeAsset ShareKhan.

"We expect the rupee to trade with a negative bias as delay in trade deal between India and US may continue to dent the domestic currency," Choudhary said, adding that any intervention by the central bank may also support the rupee at lower levels.

"Any intervention by the central bank may also support the rupee at lower levels. USDINR spot price is expected to trade in a range of 90.10 to 90.75," Choudhary added.

Meanwhile, US Trade Representative (USTR) Jamieson Greer has said the US has received the "best" ever offers from India on the proposed trade agreement amid commencement of two-day talks here between the two countries.

Speaking at a Senate Appropriations Subcommittee hearing on Tuesday in Washington, Greer said there is resistance in India to certain row crops and other meat and products. Row crops in the US include corn, soybeans, wheat, and cotton.

These remarks are important as both sides are trying to conclude the first phase of the proposed Bilateral Trade Agreement (BTA).

Dilip Parmar, Research Analyst, HDFC Securities, "The rupee plunged to a record low against the US dollar, a move largely fuelled by aggressive dollar purchases from the importers. Specifically, surging global prices for precious metals enforced metal importers into rush for dollars, creating immense pressure."

The rupee's depreciation was exacerbated amid likely limited intervention from the central bank to stabilise the market, Parmer said.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading 0.18 per cent lower at 98.61, after the FED cut rates and gave a not-so-hawkish guidance.

Brent crude, the global oil benchmark, was trading 1.25 per cent lower at USD 61.43 per barrel in futures trade.

On the domestic equity market front, the 30-share benchmark index Sensex jumped 426.86 points to settle at 84,818.13, while Nifty climbed 140.55 points to 25,898.55.

Foreign institutional investors sold equities worth Rs 2,020.94 crore on Thursday, according to exchange data.