The rupee continued its declining trend for the third successive session, slipping another 6 paise (A “paise” is a monetary unit in India, equivalent to 1/100th of a rupee.) to reach 83.23 against the US dollar early Thursday. This was influenced by a strengthening dollar and a prevailing negative sentiment in the equity market. Additionally, pervasive gloomy sentiments in the equity market, coupled with concerns over global economic factors, played a significant role in the rupee’s downward trajectory during this period.
Market insiders pointed out that the rupee’s softening was also a result of extensive equity sell-offs by overseas investors. This occurred amidst crude oil prices flirting with the USD 90 mark, further fueled by growing geopolitical concerns in the Middle East.
During early transactions in the interbank foreign exchange, the Indian currency showed vulnerability, commencing at 83.19. It soon hit its day’s low of 83.23 against the dollar, marking a decrease of 6 paise compared to its prior closing rate.
The rupee’s descent has been consistent; after a 4-paise decline on Monday, it fell by another paisa on Wednesday. It’s important to note that the forex market remained shut on Tuesday due to Dussehra celebrations. By the end of Wednesday’s session, the rupee had settled at 83.17 against the dollar.
The dollar’s surge has been linked by experts to a historic escalation in US Treasury yields, spurred by promising US home sales data released the previous day.
Simultaneously, the dollar index, a measure comparing the US dollar’s value to a group of six major world currencies, showcased a 0.20% growth, standing at 106.75 during Thursday’s trade.
On a related note, the globally recognized Brent crude benchmark recorded a 0.31% decrease, settling at USD 89.85 for each barrel.