On Tuesday, the Indian rupee depreciated further and stood at a new all-time low of 91.01 (provisional) against the US dollar, compelled by sustained outflows of foreign funds, the presence of sustained dollar demand, and the lack of any progress being made in the India-US trade deal. Forex traders indicated that these moved past positive global signals of a weaker dollar and declining oil prices.
The rupee has fallen drastically in the last couple of sessions and is currently ranging between 90 and 91 per dollar in only 10 trading days. The currency has already, in the past five sessions, lost to the greenback to the extent of about 1 per cent.
As per exchange data, the foreign institutional investors (FIIs) kept reducing their exposure to Indian stocks, selling shares valued at 1468.32 crore on Monday. The foreign capital has been leaving the country continuously, which has contributed to the strain on the domestic currency.
On the macroeconomic side, the inflation of wholesale prices was negative for two consecutive months in November, with the number standing at (-)0.32 per cent, as shown in the government published data on Monday. The inflation remained subdued even though food items like pulses and vegetables experienced a month-to-month growth. The WPI inflation was (-)1.21 per cent in October, whereas it was 2.16 per cent in November last year.
The dollar index in comparison to the greenback versus a basket of six major currencies was down by 0.08 per cent at 98.23 revealed globally. The prices of Brent crude also dropped drastically by 1.78 per cent to 59.48 per barrel in the futures market.
In the meantime, there was strong selling pressure in domestic equity markets. The index Sensex dropped by 533.50 to close at 84,679.86, and Nifty fell 167.20 to finish at 25,860.10, indicating a wider market weakness and currency issues.
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