The Indian rupee depreciated 14 paise to fresh lifetime low of 79 against the US dollar in opening trade on Wednesday amid persistent foreign capital outflows and elevated crude oil prices. At the interbank foreign exchange, the local unit opened on a weak note at 78.86 against the greenback, then lost ground to quote at 79 — its all-time low level, registering a fall of 14 paise from the previous close. On Tuesday, the rupee plunged by 48 paise to close at record low of 78.85 against the US dollar. “The rupee has fallen to 79.00 levels much earlier than anticipated as RBI withdraws its hands and with no sellers in the market of the$ and no inflows,” said Anil Kumar Bhansali, Head of Treasury, Finrex Treasury Advisors.
“Today in the evening we have the GDP data. The rupee seems to be now covering up its earlier slow depreciation and soon we could see a new figure of 80 added up to it. Most Asian currencies have today depreciated and with equities unable to give much relief more depreciation is on the cards. Exporters can now keep waiting with a stop loss of 78.75 while importers to just buy and buy more on dips if they get it,” Bhansali added.
“The risk-averse sentiments, higher crude oil prices, weaker regional currencies, slower growth, higher CAD and foreign fund outflows are the few factors to mention for the rupee depreciation. The sentiment for the rupee remains bearish till we see improvement in domestic macro and foreign fund inflows. Spot USDINR is expected to open higher and crossing 78.85 will pave way for 79.05 while the support has been shifted to 78.40, the recent top resistance. Looking ahead, the start of July can be pivotal for trend followers, and volatility is piling up around upcoming central bank meetings. A sudden policy shift could upset an anticipated seasonal calm in market activity,” said Dilip Parmar, Research Analyst, HDFC Securities.