Rupee slips 3 paise to fresh low of 79.06

Sliding for the fifth straight session, the rupee fell 3 paise to close at a fresh lifetime low of 79.06 against the US dollar on Thursday amid a strong greenback overseas and unrelenting foreign fund outflows.

At the interbank forex market, the local unit opened at 78.92 against the greenback and witnessed an intra-day high of 78.90 and a low of 79.07.

It finally settled at 79.06, down 3 paise over its previous close of 79.03.

The rupee had breached the psychologically significant level of 79 per dollar for the first time ever on Wednesday.

“The near-term outlook remains bearish for the rupee amid foreign fund outflows and risk-averse moods. Spot USD-INR is having support at 78.38 and resistance at 79.10.

“Looking at the past few days’ price action, we could see profit booking in the pair before heading higher towards 79.10,” said Dilip Parmar, Research Analyst, HDFC Securities.

On the domestic equity market front, the BSE Sensex ended 8.03 points or 0.02 per cent lower at 53,018.94, while the broader NSE Nifty declined 18.85 points or 0.12 per cent to 15,780.25.

The dollar index, which measures the greenback’s strength against a basket of six currencies, was up 0.06 per cent at 105.16.

Brent crude futures, the global oil benchmark, fell 0.17 per cent to USD 116.06 per barrel.

Foreign institutional investors remained net sellers in the capital market on Thursday as they offloaded shares worth Rs 1,138.05 crore, as per exchange data.

“Weakness in rupee was primarily following broader strength in the dollar against its major crosses. Yesterday GDP data released from the US came in marginally below estimates,” said Gaurang Somaiya, Forex & Bullion Analyst, Motilal Oswal Financial Services.

“The Indian Rupee…weakened for a third straight quarter against the dollar as aggressive policy tightening from the global central banks to curb inflation may lead to recessionary risks,” said Sriram Iyer, Senior Research Analyst at Reliance Securities.

The local currency weakened about 4.2 per cent in the April-June period, compared with almost a 2 per cent weakness in the previous quarter, Iyer added.

India’s fiscal deficit for April-May was 12.3 per cent of the government’s estimate for this financial year. The fiscal deficit was at 8.2 per cent of the Budget Estimate (RE) of 2021-22 during the corresponding period.

In the overseas markets, the dollar index was trading with gains on safe-haven demand amid renewed worries about higher rates and a global recession, he said.

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