The currency lost 32 paise from Friday’s close of 90.41, after touching an intra-day low of 90.80, its all-time low.
The impasse on the India-US trade deal despite talks ending on December 12 is keeping foreign investors in sell mode, forex dealers said. This was fueled by strong dollar demand from importers.
“Sentiment is very negative. The rupee may continue to come under pressure as the market remains thin and we approach the end of the year with no outflows,” said KN Dey, a veteran forex consultant.
The market is now witnessing dollar outflows from both equity and debt segments. A total of $2.778 billion was withdrawn by foreign portfolio investors in December alone, NSDL data showed. Outflows totaled $10.329 billion in the calendar year so far.
“Despite a better-than-expected trade balance number, the rupee was unable to find support. This lack of resilience is mainly attributed to a significant supply-demand imbalance, driven by high dollar demand from importers and continued capital inflows,” said Nandish Shah, deputy vice-president, HDFC Securities.
The rupee opened the day weaker at 90.53 and tumbled to a record intraday low of 90.80, making it the worst performer among Asian peers.
“If the rupee breaches this level, we could see a crossover of 91 to 92 against the dollar,” another forex dealer said, adding that the central bank is clearly allowing the market to determine the rupee-value and is only intervening to control any excessive volatility.
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