The rupee hit a historic intraday low for the second straight session, falling to 70.86 against the dollar. Month-end dollar demand from importers and the recent rise in oil prices have spurred the trend.
Opening at 70.69, from Wednesday’s record closing low of 70.59, the rupee fell 0.21% to an all-time closing low of 70.74.
The trend forward for the rupee , which has been spiralling downward recently, looks weak, according to currency traders. Dealers also urged higher intervention by the Reserve Bank of India (RBI) to help avoid panic-triggered trades.
“The rupee needs more support from the RBI or, some big global positive news,” said Sajal Gupta, Head Forex & Rates, Edelweiss Securities.
“The trend remains weak until [there is] some sizeable intervention by the RBI — [be it] verbal or actual. There is a lot of panic buying amongst importers and equity investors as well, who want to hedge the currency risk now.”
‘Macros remain robust’
“Our macros remain robust but panic is the key factor behind the current volatility. Everyone is a buyer of dollars in the current market,” Mr. Gupta said.
RBI has been intervening in the currency market but not strongly enough, currency dealers said.
The rupee, which has depreciated close to 10% this year, is the worst-performing Asian currency so far.
The fall in the currency also weighed on the stock market with the benchmark equity indices losing ground for the second consecutive day on Thursday with the 30-share Sensex falling 32.83 points to close at 38,690.10.
Most of the index constituents from the lending space such as IndusInd Bank, Yes Bank, Axis Bank, Kotak Bank, HDFC and HDFC Bank lost ground in an overall subdued trading session partly on account of the derivatives expiry.
