Kamal Ghorui
Rupee hit an intra-day low of 92.37 against the US dollar, tumbling 12 paise in early trading on Friday. The currency was dragged down by rising global crude prices and weak domestic market sentiment amid the ongoing conflict in West Asia. At the interbank foreign exchange market, the currency opened at 92.33 per dollar before weakening further to 92.37, marking its lowest intra-day level. Rupee had already faced strong downward pressure in the previous trading session, when it slipped to an intra-day low of 92.36 before settling at 92.25 per US dollar, marking a decline of 24 paise and its weakest closing level on record. The currency had also recorded its lowest level earlier this week, when it slipped to 92.528. Forex traders attributed the continued slide to a combination of factors including firm global crude prices, sustained selling by foreign institutional investors (FIIs), a stronger US dollar, and subdued sentiment in domestic equities. Commenting on the market situation, Anil Kumar Bhansali, head of treasury and executive director at Finrex Treasury Advisors LLP, pointed to developments in the energy market and global currency trends. “Oil prices remained elevated after Iran said the Strait of Hormuz is closed permanently till the resolution of the crisis. The dollar index also rose, European and Asian currencies all fell against the dollar,” he said. Bhansali also noted that the rupee remains under pressure and suggested that the fall could have been steeper without intervention. “The rupee has remained vulnerable and in the absence of the RBI could have reached 93.00 levels,” he told PTI. The dollar index, which tracks the strength of the US dollar against a basket of six major currencies, was trading 0.04 per cent higher at 99.77. In the commodities market, Brent crude, the global oil benchmark, rose 4.99%to $96.57 per barrel in futures trade. Domestic equity markets also traded lower during the session. Nifty50 went below 23,400 while BSE Sensex tumbled 900 points. At 10:20 am, Nifty50 was trading at 23,325.45, down 313.70 points or 1.33%. BSE Sensex was at 75,117.81, down 916 points or 1.21%. Meanwhile, exchange data showed that foreign institutional investors offloaded equities worth Rs 7,049.87 crore on a net basis on Thursday. Separately, official data released on Thursday showed that retail inflation in India increased to 3.21%in February from 2.74%in January, with higher food prices cited as the primary reason for the rise.
