The INR: Indian currency slumps 45 paise, hits record low of 87.95 per USD
Virendra Pandit
New Delhi: The American dollar’s strength in the overseas market and weak domestic equities pushed India’s currency down, depreciating it by 45 paise to hit a record low of 87.95 against the US dollar in early trade on Monday.
Forex traders said the dollar index, quoted at 108, gained after President Donald Trump said he will impose new 25 percent tariffs on all steel and aluminium imports.
The move added jitters over the global trade war with China’s reciprocal duties coming into effect, the media reported.
At the interbank foreign exchange, the Indian currency opened at 87.94 to the USD and slipped further to an all-time low of 87.95 against the greenback in initial deals, a fall of 45 paise from its previous close. On Friday last week, it had recovered 9 paise from all-time low level to close at 87.50 against the USD.
The Indian rupee was expected to open weaker on Monday after the RBI slashed interest rates on Friday last by 25 bps, and may cut another 25 bps in April 2025 to promote growth as inflation seemed to be showing a downward trend.
RBI Governor Sanjay Malhotra said on Saturday the market forces will decide the value of rupee with respect to the US dollar and the central bank is not worried about day-to-day movement of the currency value.
Addressing the media after the meeting of Union Finance Minister Nirmala Sitharaman with the RBI Board, he said the central bank focuses on the value of the rupee in the medium to long term.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.22 per cent higher at 108.28, the reports said.
Brent crude, the global oil benchmark, rose 0.63 per cent to USD 75.13 per barrel in futures trade.
In the domestic equity market, the 30-share BSE Sensex closed 548.39 points down at 77,311.80 points, while the Nifty was down 178.35 points, at 23,381.60 points.
Foreign institutional investors (FIIs) offloaded equities worth Rs. 470.39 crore in the capital markets on a net basis on Friday, according to exchange data.
Meanwhile, India’s forex reserves rose USD 1.05 billion to USD 630.607 billion for the week ended January 31, the RBI said on Friday.
In the previous reporting week, the overall reserves had increased by USD 5.574 billion to USD 629.557 billion.
