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Rupee slides past 87/$ as Trump's tariff remarks, oil rally weigh
The domestic currency opened 28 paise lower at 87.10 against the dollar on Wednesday, the lowest level since March 13 this year, according to Bloomberg. The local unit has depreciated 1.57 per cent so far this month and 1.78 per cent in this calendar year so far.
The weakness in currency came after US President Donald Trump's statement that India may face a tariff rate of 20 to 25 per cent. He, however, cautioned that the final levy still was not finalised.
The Rupee breached the key resistance level of 86.90, a zone where the Reserve Bank of India (RBI) was actively intervening yesterday, with the currency rebounding three times from that level, Anil Kumar Bhansali, head of treasury and executive director at Finrex Treasury Advisors LLP, said. Unless the RBI steps in again via the offshore Non-Deliverable Forward (NDF) market, the opening could remain under pressure, he said.
Exporters are expected to continue holding onto their dollar earnings, while importers may remain active in the spot market for purchases until better hedging levels emerge, he said.
Adding to the downward pressure are persistent foreign portfolio investor (FPI) outflows from Indian equities, with capital being redirected toward developed markets that are currently trading at record highs, analysts noted.
FPIs have sold Indian equities for the seventh straight session in the secondary market, according to data from NSE. On Tuesday, FPIs offloaded stocks worth ₹4,636.60crore. In the last seven sessions, global funds have sold stocks worth ₹24271.98 crore.
The dollar index is poised for the best month this year, with the measure of the greenback against a basket of six major currencies, down 0.16 per cent at 98.72.
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