At 84.37 against the US dollar, the rupee reaches a record low

Early Friday trading saw the rupee drop 5 paise to an all-time low of 84.37 versus the US dollar due to a sluggish trend in domestic stocks and ongoing outflows of foreign funds. The recent interest rate drop by the US Federal Reserve, according to forex dealers, indicates a change in the global financial scene. Furthermore, volatility may re-enter the rupee’s trajectory given the impact of Donald Trump’s tax and trade plans on international markets.

The rupee opened at 84.32 versus the US dollar at the interbank foreign exchange, but it soon dropped to an all-time low of 84.37, up 5 paise from its previous closing. The rupee fell 1 paisa versus the US dollar on Thursday, closing at a new all-time low of 84.32.

“The spotlight will now be on the Reserve Bank of India (RBI) and how effectively it navigates this shifting currency landscape. In such a dynamic environment, only those who adapt swiftly will thrive in the market ahead,” CR Forex Advisors Managing Director Amit Pabari said.

The US Fed lowered its benchmark rate by 0.25 basis points to a target range of 4.5% to 4.75 percent in its most recent monetary policy announcement. The Fed acknowledged balanced risks in inflation and employment and took a neutral-to-dovish stance in its accompanying statement. At 104.53, the dollar index, which measures the strength of the US dollar relative to a basket of six other currencies, was trading slightly higher by 0.02 percent.

Brent crude, the global oil benchmark, fell 0.65 per cent to USD 75.14 per barrel in futures trade.

“In this dynamic environment, volatility in the USD/INR pair is expected, with the RBI likely maintaining a range between 83.80 and 84.50. If the dollar’s momentum stalls amid future Fed rate cuts and weakening investor confidence, the rupee could gradually strengthen toward the lower end of this range,” Pabari said.

The Sensex fell 14.23 points, or 0.02 percent, to 79,527.56 points on the domestic equity market front. At 24,183.90 points, the Nifty dropped 15.45 points, or 0.06 percent. According to exchange data, foreign institutional investors (FIIs) sold shares worth Rs 4,888.77 crore on Thursday, making them net sellers in the capital markets.