Rupee declines to all-time low of 89.79 against US dollar in intraday trade; here's why

Forex traders said a strong greenback and a rise in international crude oil prices also weighed down the Indian currency.

Moreover, significant dollar demand by importers exerted persistent downward pressure on the local currency.

At the interbank foreign exchange market, the rupee opened at 89.45, then lost its ground and fell to a record low of 89.79 (provisional) against the US dollar in intraday trade, registering a fall of 34 paise over its previous close.

On Friday, the rupee dropped nine paise to settle at 89.45 against the US dollar.

On November 21, the rupee plunged 98 paise to close at its lifetime low of 89.66 against the US dollar.

“The rupee has been under pressure, as there has been heavy buying by FPIs taking out money, with outflows happening as stakes were sold in various companies due to high valuations, oil buying, gold buying and repayments by corporates and the central government,” Anil Kumar Bhansali, head of treasury and executive director at Finrex Treasury Advisors LLP, said.

Bhansali further noted that trade tensions with the US continue, with expectations of a settlement towards the end of the year.

On November 28, Commerce Secretary Rajesh Agrawal said India is hopeful of reaching a framework trade deal with the US this year itself that should address the tariff issue to the benefit of Indian exporters.

Both countries have been in negotiations for a long time, and the first tranche of a bilateral trade deal was expected by the fall of 2025, but the Trump administration's imposition of tariffs on Indian exports has created hurdles.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading 0.04% higher at 99.50.

Brent crude, the global oil benchmark, rose 1.96% to $63.60 per barrel in futures trade.

On the domestic equity market front, both benchmark indices, SENSEX and NIFTY50, declined from their record highs by noon. The SENSEX was trading 122.58 points, or 0.14%, lower at 85,584.09, while Nifty was down 46.35 points, or 0.18%, to 26,156.60.

Foreign institutional investors sold equities worth ₹3,795.72 crore on a net basis on Friday, according to exchange data.