Rupee settles at record low of 95.73 against US dollar

The rupee weakened further and fell to a record low of 95.73 (provisional) against the US dollar on Thursday, amid a strong dollar and worries over inflation amid elevated energy prices.

Forex traders said the rupee is expected to trade with a negative bias amid inflation concerns and the strength of the US dollar in the overseas market.

The West Asia crisis and the blockade of the Strait of Hormuz have disrupted crude petroleum imports into India. Also, the sharp rise in crude prices has made fuel imports costlier.

The rupee has become the worst-performing currency in Asia for the year, registering a loss of over 6 per cent so far this year, as elevated crude oil prices, a strong dollar and concerns over the West Asia crisis weighed on investor sentiments, traders said. At the interbank foreign exchange market, the rupee opened lower at 95.74 against the American currency.

In a volatile trade, the USD/INR pair witnessed an intra-day high of 95.61 and an all-time intraday low of 95.96 against the greenback before settling at 95.73 (provisional), down 7 paise from its previous close. The rupee on Wednesday slipped to an all-time low of 95.80 against the US dollar, and settled at 95.66 against the greenback.

“We expect the rupee to trade with a negative bias amid inflation concerns and a strong dollar. Rising inflation in the US dimmed expectations of a rate cut by the Fed,” said Anuj Choudhary, Research analyst at Mirae Asset ShareKhan.

Choudhary said geopolitical tensions between the US and Iran and foreign fund outflows may also pressurise the rupee. However, any intervention by the RBI and import duty hike on gold and silver may support the rupee at lower levels. $/INR spot price is expected to trade in a range of 95.50 to 96.10, Choudhary added.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading at 98.51, down 0.01 per cent.