Mumbai, Dec 4 The Indian rupee continued its sharp fall on Thursday, sliding 22 paise and remaining well above the 90-per-dollar mark amid weak global cues.
The currency has been under pressure due to persistent equity outflows and the lack of clarity around the India-US trade deal, according to market experts.
The rupee opened weaker at 90.41 against the US dollar, compared to its previous close of 90.19. This decline came just a day after the rupee breached the psychologically important 90 mark for the first time on December 3, when it hit a new all-time low.
Despite the steep fall, the Reserve Bank of India has so far refrained from heavy intervention, which analysts say is contributing to the pressure on the currency.
Experts believe the central bank may address the rupee’s recent weakness in its upcoming monetary policy announcement. However, they also expect the RBI to avoid giving any specific comfort levels or targets for the currency, even as depreciation concerns grow.
Meanwhile, Indian domestic indices opened lower as continued foreign investor selling kept sentiment muted on Dalal Street. Analysts said that the opening also coincided with the weekly F&O expiry for the Sensex, adding to the cautious mood among traders.
Foreign institutional investors (FIIs) extended their selling streak for the third consecutive session on December 3, offloading equities worth Rs 3,692 crore. Meanwhile, domestic institutional investors (DIIs) continued their steady accumulation, purchasing Rs 4,730 crore during the same session.
The positive factor is India’s improving fundamentals - robust economic growth, low inflation, supportive monetary and fiscal policies and indications of steadily improving corporate earnings, according to market watchers.
They added that it is important to understand that the negative factor may weigh on the market in the near-term, but the positive factor will dominate in the mid-term enabling the market to resume its upward journey.
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