Rupee Hits Record Low At 84.38 Against US Dollar

The rupee slipped 1 paisa to a record low of 84.38 against the US dollar in early trade on Monday, impacted by persistent foreign fund outflows and a muted trend in domestic equities.

Forex traders noted that the rupee is likely to remain under pressure unless there is a softening of the dollar index or a slowdown in foreign fund outflows.

At the interbank foreign exchange, the rupee opened at an all-time low of 84.38 against the greenback, marking a fall of 1 paisa from its previous close.

On Friday, the rupee declined by 5 paise to a new lifetime low of 84.37 against the US dollar, registering a drop for the third consecutive session.

Last week, the rupee faced pressure amid the US elections and sustained foreign fund outflows. Following nearly $12 billion in equity sell-offs in October, foreign funds have continued to retreat in November, with outflows of approximately $1.6 billion recorded in the first 10 days.

This trend reflects the overvaluation of Indian equities and underwhelming Q2 earnings, according to CR Forex Advisors Managing Director Amit Pabari.

"In the medium term, the rupee is expected to trade within the 83.80 to 84.50 range, as the Reserve Bank appears to limit the rupee's downside with sufficient forex reserves at hand," Pabari added.

Meanwhile, the dollar index, which measures the greenback's strength against a basket of six major currencies, was trading 0.05 per cent higher at 105.05.

Brent crude, the global oil benchmark, declined 0.37 per cent to $73.60 per barrel in futures trading.

In the domestic equity market, the Sensex was trading down by 12.47 points, or 0.02 per cent, at 79,473.85 points, while the Nifty dropped 5.65 points, or 0.02 per cent, to 24,142.55 points.

Foreign Institutional Investors (FIIs) were net sellers in the capital markets on Friday, offloading shares worth ₹3,404.04 crore, as per exchange data.

Meanwhile, India's forex reserves fell by $2.675 billion to $682.13 billion for the week ending 1 November, the RBI reported on Friday.

In the previous week, the total reserves had decreased by $3.463 billion to $684.805 billion. At the end of September, reserves had reached an all-time high of $704.885 billion.