Rupee slips 13 paise to hit fresh lifetime low of 96.83 against US dollar

Mumbai: Declining for the ninth consecutive session, the rupee depreciated 13 paise to close at a fresh lifetime low of 96.83 (provisional) against the US dollar on Wednesday as elevated global crude prices amid the West Asia crisis stoked inflation worries.

At the interbank foreign exchange market, the rupee opened at 96.89 against the US dollar, then lost further ground to touch a record low of 96.95 and a high of 96.65, before settling at 96.83 (provisional), registering a fall of 13 paise over its previous close.

In the previous session, the rupee tumbled 50 paise to settle at 96.70 against the dollar.

"Indian rupee hit fresh lows on a strong dollar and a surge in US treasury yields. US 30-year treasury yields rose to a two-decade high, while the 10-year yields rose to a 16-month high.

"This led to inflation worries and sell-off in global markets, making the markets risk-averse," said Anuj Choudhary, Research Analyst, Commodities Research at Mirae Asset Sharekhan.

"We expect the rupee to trade with a negative bias on risk aversion in the global markets amid inflation worries. A strong dollar and rising US Treasury yields raised inflation concerns and trimmed rate cut expectations. USD/INR spot price is expected to trade in a range of Rs 96.5 to Rs 97.10," he added.

The rupee's sharp decline has emerged as one of the biggest economic warning signs for policymakers, investors and businesses. Once considered among Asia's more stable currencies, the rupee has now become one of the worst-performing emerging market currencies this year, pressured by a toxic mix of expensive oil, capital outflows, widening trade deficits and a surging US dollar.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading at 99.42, higher by 0.09 per cent.

Brent crude, the global oil benchmark, was trading down 2.77 per cent at $109.95 per barrel in futures trade.

The US Senate advanced legislation on Tuesday that seeks to force President Donald Trump to withdraw from the Iran war, as a growing number of Republicans defied Trump's wishes.

On the domestic equity market front, Sensex rose by 117.54 points to settle at 75,318.39, and Nifty was up 41 points to 23,659.

Foreign Institutional Investors turned net sellers after three sessions of buying and offloaded equities worth Rs 2,457.49 crore on Tuesday, according to exchange data.