Rupee slips 11 paise, touches 85.75 against US dollar in early trade
The Indian rupee fell 11 paise, reaching 85.75 against the US dollar in early trading on Thursday. This drop comes amid a strong dollar index and rising US 10-year bond yields. Forex traders attributed the rupee’s decline to the continued strength of the dollar, which has been gaining against global currencies throughout 2024. Additionally, foreign fund outflows have added pressure on the local currency.
Global markets are experiencing low trading volumes as major economies like the UK and Europe remain in the holiday season. The rupee opened at 85.69 but slipped to 85.75, marking an 11-paise drop from the previous day’s close of 85.64. On December 27, the rupee hit a lifetime low of 85.80, intensifying concerns over its strength.
The dollar index, which tracks the dollar’s performance against six major currencies, stood at 108.32, down by 0.15%. The index has remained strong, hovering around 108 for several sessions. Experts are closely watching potential policy changes by US President Donald Trump.
These policies could boost economic growth but might also lead to higher inflation. This could prompt the US Federal Reserve to keep interest rates high for longer, which could continue supporting the dollar.
Market analysts expect the rupee to trade within the 85.50-85.80 range. Anil Kumar Bhansali, Head of Treasury at Finrex Treasury Advisors, highlighted that liquidity positions are key, as near-term premiums remain elevated. Meanwhile, Brent crude was up by 0.44% at USD 74.97 per barrel in futures trade.
On the domestic front, the 30-share BSE Sensex gained 270.48 points (0.34%), reaching 78,777.89 points, while the Nifty rose 85.15 points (0.36%) to 23,828.05 points. Foreign Institutional Investors (FIIs) remained net sellers, offloading Rs 1,782.71 crore in capital markets on Wednesday.
In economic news, December’s Goods and Services Tax (GST) revenue rose by 7.3%, totaling Rs 1.77 lakh crore, compared to last year’s Rs 1.65 lakh crore. However, November’s collection had been higher at Rs 1.82 lakh crore, showing an 8.5% annual increase.
