Rupee slide continues: Indian currency hits new low of 90.43 against US dollar

The currency declined 17 paise to open at 99.36, compared to the previous close of 99.19. It plunged to a new low of 90.43 a dollar in early morning trade.

Steady outflows from FPIs have been a key factor putting pressure on the currency. (File)

The Indian rupee extended its slide on Thursday to decline to a new low of 90.43 against the dollar as delay in India-US trade deal and continued outflows from foreign portfolio investors (FPIs) from the domestic equity market dampened investor sentiments.

The currency declined 17 paise to open at 99.36, compared to the previous close of 99.19. It plunged to a new low of 90.43 a dollar in early morning trade.

“USD/INR pair remains firmly in its rising channel. It is now testing the upper boundary near 90.30–90.40, signalling strong bullish momentum. Immediate support sits at 89.20, followed by deeper channel support near 88.60. A sustained break above 90.30 could open room toward 90.50 and 91.00, while failure to clear the top may trigger a pullback toward mid-channel levels, said Dipti Chitale CEO Mecklai Financial Services Pvt Ltd..

Steady outflows from FPIs have been a key factor putting pressure on the currency. So far in this calendar year, FPIs have sold Rs 1.52 lakh crore of shares. In the first three days of December, they have offloaded Rs 8,369 crore of equities.

“A depreciating currency rarely attracts global investors — and this year proves it painfully well. Every exit drains confidence — and the currency pays the price,” said Amit Pabari, Managing Director and founder, CR Forex.

Immediate support for the rupee is at 89.20, followed by deeper channel support near 88.60. A sustained break above 90.30 could open room toward 90.50 and 91.00, while failure to clear the top may trigger a pullback toward mid-channel levels, Chitale said.

“The way the rupee broke past the 90 mark on Wednesday signals that the pressure hasn’t eased. In fact, the move suggests that pressure will remain, with the pair potentially drifting toward the 90.70–91.00 zone in the near term, said Pabari of CR Forex.

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Market participants will closely watch Reserve Bank of India Governor Sanjay Malhotra’s remarks on the rupee in his monetary policy address on Friday.

Chief Economic Advisor V Anantha Nageswaran on Wednesday said he was not losing sleep over the rupee’s decline, expressing confidence that the Indian currency “will come back next year.” The rupee slide was not “impacting inflation or exports” right now, he added.

In an interview to The Indian Express, Pranjul Bhandari, HSBC’s Chief India Economist/Strategist and ASEAN Economist, said currency depreciation was the “perfect medicine” to support India’s services exports, against the backdrop of 50 per cent US tariffs imposed on India.