Rupee Closes At 1-Month Low Of 73.90 Against Dollar

A selloff in domestic equity markets, strength in the US currency against a basket of currencies and foreign fund outflows put pressure on the rupee, say analysts.

Rupee Closes At 1-Month Low Of 73.90 Against Dollar

The rupee has recovered 3.91% from its all-time low of 76.91 against the dollar

The rupee declined by 33 paise - or 0.45 per cent - to end at 73.90 against the US dollar on Thursday, its weakest close since August 26. The currency moved within a range of 21 paise, between 73.75 and 73.96 against the greenback, having started the day weaker at 73.81 compared to its previous close of 73.57. A selloff in domestic equity markets, strength in the US currency against a basket of currencies and foreign fund outflows put pressure on the rupee, say analysts.

The dollar index - which measures the dollar against six other currencies - was last seen trading 0.16 per cent higher, having risen as much as 0.22 per cent earlier on Thursday.

Crude oil prices moved lower, despite a fall in US inventories last week, supported by strength in the dollar and a renewed wave of COVID-19 cases in Europe that led to renewed travel restrictions in several countries.

Brent crude futures - the global benchmark for oil rates - were down 0.36 per cent at $41.62 per barrel, having declined to$41.27 per barrel earlier.

"So far, when the peers depreciated significantly, the rupee showed resilience, as it was supported by the inflows pertaining to IPOs that flowed until yesterday," said Amit Pabari, managing director at forex advisory firm CR Forex.

Mumbai-based Angel Broking's Rs 600-crore IPO concluded on Thursday with a muted response from investors. The public offer was subscribed 3.94 times.

"If the inflows halt, the price action of the rupee suggests the (USD-INR) pair is tilted towards weakness in the immediate future given by negative sentiments across the globe," Mr Pabari added.

Foreign institutional investors net sold Indian equities worth Rs 1,885.69 crore on Thursday, provisional stock exchange data showed.

At the current level, the rupee has recovered 3.91 per cent from its all-time low of 76.91, registered in April this year.