The delay in the trade agreement has weakened investor sentiment, which has directly impacted the rupee. In addition, the prevailing risk-averse sentiment in the market and strong demand for the US dollar from importers further pressured the rupee.
Rupee continues to fall
New Delhi: The rupee continues its downward trend. On Monday, the first trading day of the week, the Indian rupee fell by 26 paise against the US dollar, reaching a record low of 90.75 in intra-day trading. Uncertainty surrounding the India-US trade deal and continuous selling by foreign investors kept the rupee under pressure.
Delay in trade agreement weakens investor sentiment
According to forex market experts, the delay in the trade agreement has weakened investor sentiment, which has directly impacted the rupee. In addition, the prevailing risk-averse sentiment in the market and strong demand for the US dollar from importers further pressured the rupee.
In the interbank foreign exchange market, the rupee opened at 90.53 against the US dollar, then weakened further to a record intra-day low of 90.75, registering a fall of 26 paise from the previous close. On Friday, the rupee had slipped 17 paise against the US currency to close at an all-time low of 90.49.
What do experts say?
Anil Kumar Bhansali, Head of Treasury and Executive Director at Finrex Treasury Advisors LLP, said that the next support level is at 90.80, after which we could see a crossover towards 91 to 92. The RBI has clearly allowed the market to determine the price and has only intervened to control excessive volatility.
India-US conclude two-day talks
India and the US concluded two days of talks last Thursday, during which both sides exchanged views on trade-related issues, including ongoing negotiations for a mutually beneficial bilateral trade agreement.
Prime Minister Modi and US President Trump discussed ways to maintain momentum in the bilateral economic partnership during a phone call last Thursday, amidst indications that both sides are nearing finalization of the much-awaited trade deal. Dollar Index Falls
Meanwhile, the dollar index, which measures the strength of the dollar against a basket of six currencies, was trading 0.02 percent lower at 98.37. In the domestic stock market, the 30-share benchmark Sensex was trading 51.77 points lower at 85,215.89, while the Nifty was down 31.30 points at 26,015.65.
Brent Crude Rises to $61.36 per Barrel
Global oil benchmark Brent crude futures were trading 0.41 percent higher at $61.36 per barrel. According to exchange data, foreign institutional investors sold shares worth ₹1,114.22 crore on Friday.
Foreign Exchange Reserves Rise to $687.26 Billion
Meanwhile, the Reserve Bank of India (RBI) reported on Friday that India's foreign exchange reserves increased by $1.033 billion to $687.26 billion in the week ended December 5. In the previous reporting week, India's foreign exchange reserves had decreased by $1.877 billion to $686.227 billion.
