Rupee slips to all-time low of ₹83.80 against US dollar in early trade

Rupee opened on a muted note and fell to an all-time low of ₹83.80 against the US dollar on Monday, as the risk off situation in world markets kept the dollar well bid.

Forex traders said the sharp downfall in the domestic unit came on the heels of a significant downturn in the Indian equity markets and significant foreign fund outflows.

At the interbank foreign exchange market, the local unit opened at ₹83.78 and then fell to an all-time low of ₹83.80 against the American currency, registering a fall of 8 paise from its previous close.

On Friday, the rupee settled 1 paisa higher at ₹83.72 against the US dollar in a range-bound trade.

Over the past week, major global equities experienced a significant sell-off. The release of last week's US Jobs Report, which fell significantly below expectations, sparked recession fears in the market, increasing demand for safe-haven assets.

Additionally, the upcoming US elections in November are likely to keep investors on edge. Meanwhile, tensions are escalating in the Middle East following the assassination of Hamas leader Ismail Haniyeh in Tehran.

The Indian rupee has remained largely south of the ₹83.70 level despite the weakening of the US dollar. Additionally, oil prices saw an 11% correction.

"However, despite these favourable conditions, the rupee has not appreciated, likely due to the Reserve Bank of India capping its movement. In the short term, the rupee is expected to trade within the range of ₹83.75 to ₹83.90," CR Forex Advisors MD Amit Pabari said.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was at 102.95, lower by 0.24%.

Brent crude futures, the global oil benchmark, rose 0.30% to USD 77.04 per barrel.

In the domestic equity market, the 30-share BSE Sensex was trading 1533.11 points, or 1.89% lower at 79,448.84 points. The broader NSE Nifty was down 463.50 points, or 1.88%, to 24,254.20 points.

Foreign Institutional Investors (FIIs) were net sellers in the capital markets on Friday as they offloaded shares worth ₹3,310.00 crore, according to exchange data.