Rupee falls 12 paise to settle at record low of 92.40 against US dollar

The rupee declined 12 paise to settle at an all-time low of 92.40 (provisional) against the US dollar on Tuesday, pressured by rising crude oil prices and sustained outflow of foreign funds amid the West Asia crisis.A positive trend in domestic equity markets also helped the domestic currency at the lower level, even as investors remained watchful of the US Federal Reserve’s interest rate decision, forex traders said.

At the interbank foreign exchange, the local unit opened at 92.35 and hit the lowest intra-day level of 92.47 against the greenback. The unit finally ended at a new lifetime low of 92.40 (provisional), registering a loss of 12 paise from the previous closing level.Despite a marginal gain of 2 paise on Monday, the local unit ended the session at a near record low of 92.28 against the dollar.

The rupee, Asia’s worst-performing currency, touched its lowest intra-day level of 92.47 for the first time on March 13, when it ended the session at 92.30 against the dollar.

Anuj Choudhary, Research Analyst, Mirae Asset ShareKhan, said the rupee declined due to a surge in crude oil prices and continued FII outflows. However, a recovery in domestic markets and softening of the US dollar prevented a sharp fall in the rupee. He said that any hopes of reopening the Strait of Hormuz and intervention by the RBI may support the rupee at lower levels.

“Investors will also watch out for the FOMC, ECB, Bank of Japan and Bank of England’s monetary policy this week. USD-INR spot price is expected to trade in a range of INR 92.10 to INR 92.75,” Choudhary added.Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.05 per cent higher at 99.52.Brent crude, the global oil benchmark, was trading 2.65 per cent higher at USD 102.86 per barrel in futures trade.

On the domestic equity market front, the Sensex gained 567.99 points, or 0.75 per cent, to settle at 76,070.84, while the Nifty climbed 172.35 points, or 0.74 per cent, to 23,581.15.The latest Government data, released on Monday, showed the country’s trade deficit narrowed to $27.1 billion in February compared to January.Merchandise exports dropped marginally by 0.81 per cent to $36.61 billion, while imports increased by 24.11 per cent to $63.71 billion in February this year from $51.33 billion recorded a year ago.

The country’s wholesale price inflation rose to an 11-month high of 2.13 per cent in February, driven by an uptick in prices of food and non-food articles, even though vegetable prices eased on a month-on-month basis, another Government data showed on Monday.Foreign institutional investors sold equities worth INR 9,365.52 crore on a net basis on Monday, according to exchange data.