Mumbai (Maharashtra) [India], March 20 : The Indian rupee weakened further and breached the 93 mark against the US dollar in early trade on Friday, hitting a fresh historic low amid ongoing conflict in West Asia and continued foreign outflows.
The rupee opened at a record low of 92.89 per dollar on Friday and soon depreciated further to cross the 93 level, indicating sustained pressure on the domestic currency.
Currency experts attributed the fall to elevated crude oil prices, geopolitical uncertainty and persistent selling by foreign portfolio investors (FPIs).
K N Dey, a currency expert, told ANI, "Rupee now trading at 93.15/16, having broken 93 figure some time back. Rupee opened today at all-time low 92.89/90. Yesterday the NDF high was approx. 93.40 and it traded in the range of 93.25 to 93.35 most of the day."
He added that there are no signs of de-escalation in the Middle East, which is keeping markets highly volatile. "No sign of de-escalation in the Middle East zone with Brent touching 116 yesterday and now around 106. Highly speculative/volatile zone," he said.
Dey also highlighted that sustained foreign outflows are adding pressure on the rupee. "There is also no end of FII's sell off in the equity market with a net sell of approx. Rs 80,000 crores which is more than 8.5 billion dollars from March 1st till yesterday. This adds more pressure to the falling rupee," he noted.
According to him, the Middle East crisis along with large FPI outflows is likely to continue weighing on the rupee, with the peak yet to be seen. He added that intervention by the Reserve Bank of India (RBI) is helping slow the pace of depreciation but is not reversing the trend.
"Only if there is some de-escalation in the Middle East crisis then we could see some pause on the falling rupee," he said.
Ponmudi R, CEO of Enrich Money, also noted continued pressure on the currency.
"There is continued pressure on the Indian rupee amid elevated crude prices and global risk aversion. The structure remains bullish, supported by higher highs and higher lows. A sustained move above 93.00 will strengthen the upside bias, with resistance at 93.20-93.40," he said.
He added that on the downside, support levels are placed at 92.70, followed by 92.50-92.40.
The continued weakening of the rupee reflects the impact of global uncertainties, rising oil prices and capital outflows.
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