The Indian rupee depreciated 7 paise to end at a record closing low against the US dollar on Thursday weighed down by stronger American currency overseas and rising crude oil prices. The local currency ended at 83.40 a dollar as compared to its previous close of 83.33.
The dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading higher by 0.42% at 103.20, but appears on course to register a monthly decline of more than 3%, its sharpest monthly fall in a year.
On Wednesday, the rupee settled at 83.33 against the US dollar. The local unit had hit a life-time low of 83.42 to the dollar on November 10.
Fort the month, rupee was the worst performer among key Asian peers in November and posted a slight loss of 0.1%.
While the dollar index has dropped more than 3.5% in November so far, the rupee has largely remained on the sidelines in the face of strong local dollar demand, traders told Reuters.
US Treasury yields have slumped in November with the 10-year yield falling nearly 60 basis points amid rising bets that the US Federal Reserve could begin easing rates starting May next year.
The rupee has been drifting lower in a tight range and that is likely to continue for now,” said Anindya Banerjee, head of foreign exchange research at Kotak Securities.
Investors now await India’s GDP and US inflation data due later in the day.
Meanwhile, surging oil prices kept rupee under pressure. Crude oil prices rose for a third day ahead of a key OPEC meeting wherein the cartel will set output policy for the new year and is expected to announce fresh supply cuts.
Brent crude futures rallied 1.0% to $83.93 a barrel, while US West Texas Intermediate (WTI) crude futures gained 0.96% to $78.61 a barrel.
On the domestic front, the Indian stock market indices ended Thursday’s choppy session higher.
The Sensex gained 86.53 points, or 0.13%, to close at 66,988.44, while the Nifty 50 settled 36.55 points, or 0.18%, higher at 20,133.15.
On Wednesday, the Foreign institutional investors (FIIs) net bought Indian shares worth ₹71.91 crore, while Domestic Institutional Investors (DIIs) net purchased shares to the tune of ₹2,360.81 crore, as per provisional data available on the exchanges.