Rupee Hits Record Low Against US Dollar At 83.41 Amidst Rising Demand

In the early trade on December 5, the Indian rupee experienced a dip of 3 paise, reaching an unprecedented low of 83.41 against the US dollar. This downturn is attributed to an increased demand for the American currency from importers. Investors are now on the edge of their seats, eagerly awaiting signals from the Reserve Bank of India (RBI) as its Monetary Policy Committee embarks on its bi-monthly review meeting.

Foreign exchange traders are closely monitoring the situation, recognizing the pivotal role the upcoming RBI monetary policy decision may play. The central bank is set to unveil its decision on Friday after the conclusion of its review meeting that commences this Wednesday.

At the interbank foreign exchange market, the rupee initiated trading at its historic low level of 83.41 against the US dollar, marking a 3-paise decrease from its previous close. Despite domestic benchmark indices reaching new heights and ending the day positively, the rupee settled at 83.38 against the US dollar on Monday, as per a report in Economic Times.

Anticipation of heightened volatility looms as the market braces for crucial economic indicators from the United States. Domestically, all eyes are on the RBI policy statement, with expectations leaning towards the central bank maintaining current interest rates. Analysts suggest that any dovish comments in the statement could potentially trigger a further decline in the value of the rupee. Gaurang Somaiya, a forex and bullion analyst at Motilal Oswal Financial Services, emphasized the significance of the Services PMI number, stating that better-than-expected data could lead to gains for the US dollar. He predicts the USD-INR (Spot) to hover between 83.20 and 83.50.

Simultaneously, the dollar index, gauging the greenback's strength against a basket of six currencies, observed a 0.09% decline at 103.62. In the global oil market, Brent crude futures, the benchmark for oil, experienced a marginal 0.05% slip, reaching $77.99 per barrel.

On the domestic equity front, the Sensex recorded a notable advancement of 195.13 points, or 0.28%, reaching 69,060.25 points. The Nifty also demonstrated growth, surging by 56.15 points, or 0.27%, to 20,742.95 points.

Foreign institutional investors contributed to positive sentiments in the capital market on Monday, with net purchases totaling ₹2,073.21 crore, according to exchange data.

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