Rupee at new low

way2barak, Sept 19: The rupee tumbled to a record closing low of 83.27 against the dollar on Monday.

Global markets have turned risk-averse as investors await key decisions from the US Federal Reserve, the Bank of England and Bank of Japan amid a rising US yield curve.

Moreover, foreign fund outflows and a widening trade deficit weighed on the domestic currency. Rising crude oil prices and the greenback hovering near six-month highs have further dented the rupee’s prospects.

Forex circles said rising crude oil prices can drag the rupee beyond 83.29 recorded intra-day on October 20, 2022.

The international benchmark Brent crude is trading at $94.38 a barrel at the time after almost touching $95 at $94.90.

Much would depend on the Reserve Bank of India (RBI), which is defending this level through periodic dollar sales.

The dollar index, which reflects the greenback’s global strength, was firm at 105.28 against the previous close of 105.32. On the other hand, the 10-year US treasury yield was ruling at 4.33 per cent against the last close of 4.32 per cent.

With the 11-day stock rally over, equities also did not provide any support to the rupee.

The Sensex lost 241.79 points or 0.36 per cent to end at 67596.84, while the Nifty ended 59.05 points lower at 20133.30.

Shares of Vodafone Idea witnessed activity on reports that it will be acquired by one of the US giants that include Verizon, Amazon or Starlink.

However, the telco denied the news. “We wish to submit that the said news item is incorrect. The company is not in any such discussion with any of the named parties,’’ it said in a regulatory filing. Its clarification did not stop the selling pressure on the stock which lost 6.82 per cent to close at Rs 10.93 in the BSE.

Meanwhile, Tata Steel witnessed volatility as it leapt to a 52-week high of Rs 134.85 after announcing an agreement with the UK government to invest in electric arc furnace steelmaking at the Port Talbot site. However, profit booking amid broad market weakness saw the counter ending lower Rs 1.60 at Rs 130.45.