Forex pressure mounts, rupee breaches 94

The rupee slumped 29 paise to close at record low of 94.05 (provisional) against the US dollar on Wednesday as heavy FII outflows and simmering tensions in West Asia kept investors on the edge.

Even a drop in global crude oil prices, weaker greenback, and positive sentiments in the domestic equity markets could not provide any respite to the local unit, forex traders said.

At the interbank foreign exchange, the local unit opened at 93.94 against the US dollar and traded in the range of 93.86-94.08, before settling at an all-time low of 94.05 (provisional), down 29 paise from its previous close. The rupee dropped 23 paise to close at 93.76 against the US dollar on Tuesday.

“Markets were in risk-on mode but the rupee was still getting sold against the dollar with the month-end demand keeping the bids high despite the stock markets moving up and dollar index down. All risk assets were up against the dollar as markets were expecting some agreement to happen between the two warring countries US-Israel and Iran,” Anil Kumar Bhansali, Head of Treasury and Executive Director, Finrex Treasury Advisors LLP, said.