The Indian rupee witnessed a historic downturn against the US dollar on Friday, hitting an all-time low amidst a backdrop of diminished offshore Chinese yuan and intensified local dollar demand, according to Reuters, citing market experts.
Closing at 83.4250 against the dollar, the rupee’s descent slightly surpassed its earlier nadir of 83.43 during the trading session, culminating in a 0.7% weekly plunge, marking its sharpest decline in seven months.
Traders attributed the rupee’s depreciation to insufficient dollar inflow coupled with the yuan’s slump and the dollar’s robust performance, collectively exerting downward pressure on the Indian currency.
Moreover, a dearth of dollar liquidity in the market further exacerbated the rupee’s devaluation.
Despite some initial dollar sales by the Reserve Bank of India, intervention ceased as the day drew to a close, leaving the rupee vulnerable to continued depreciation.
Amidst these developments, the dollar index, gauging the dollar’s strength against other global currencies, ascended by 0.4%, with various Asian currencies, including the Korean won and the offshore Chinese yuan, witnessing declines.
Market analysts underscore the significance of forthcoming days for the rupee, cautioning that prolonged proximity to its record low could precipitate a bleak outlook for the currency.
