Mumbai, November 4: The Indian rupee dropped 4 paise on Monday to a record low of 84.11 against the US dollar, pressured by weak domestic equity markets and sustained foreign institutional investor (FII) outflows. This decline comes amid a broader trend of global economic uncertainty and concerns about rising oil prices.
The rupee opened at 84.07 in the interbank forex market, fluctuating between a high of 84.06 and a low of 84.12 before settling at its lowest-ever rate of 84.11. The dip follows a brief recovery last Thursday when the rupee gained a paisa to close at 84.07 against the dollar. Markets were closed Friday in observance of Diwali.
Forex analysts attribute the rupee’s weakening to negative market trends, with the BSE Sensex tumbling 941.88 points (1.18%) to close at 78,782.24 and the Nifty sliding 309 points (1.27%) to end at 23,995.35. FII outflows further compounded these losses, with foreign investors selling shares worth ₹4,329.79 crore on Monday alone.
Anuj Choudhary, Research Analyst at Sharekhan by BNP Paribas, highlighted that factors such as crude oil’s 2.63% rise to $75.02 per barrel and the softer US dollar on the back of weaker-than-expected job and manufacturing data have influenced investor sentiment. “While a weaker dollar could support the rupee at lower levels, sustained FII outflows and domestic market weakness suggest a continued bearish outlook for the rupee,” he noted. Choudhary expects the USD/INR rate to fluctuate between 83.95 and 84.30.
In addition, analysts will closely monitor the upcoming FOMC meeting and US election results on November 6-7 for signals that may impact the dollar-rupee trajectory. Anil Kumar Bhansali, Head of Treasury at Finrex Treasury Advisors LLP, commented, “With RBI adjusting its protective level, the rupee is now vulnerable to further declines if foreign selling continues.”
Meanwhile, India’s foreign exchange reserves fell by $3.463 billion to $684.805 billion in the week ending October 25, marking a continued dip from the all-time high of $704.885 billion seen in September. Market watchers are now assessing how international factors and upcoming economic data may shape the rupee’s performance in the near term.
