Rupee drops past 84 against the US dollar for the first time on high oil prices, FII outflow

Indian rupee fell below 84 against the US dollar for the first time on Friday, weighed down by concerns over the recent jump in oil prices and the exodus of foreign money from the equity markets.

The local currency dropped to a low of 84.0525 to the dollar, and was last quoted at 84.05, down from 83.9675 in the previous session. Rupee surpassed the previous lifetime low of 83.9850 hit on September 12.

The dollar index, which gauges the greenback’s strength against a basket of six currencies, was down 0.11% to 102.87 points.

“The Rupee continues to trade within a defined range, with global headwinds keeping the pressure on. Despite these challenges, the rupee’s downside appears limited, supported by the RBI’s sizable reserves. Additionally, the recent rise in metals—known for their negative correlation with the dollar index—is expected to benefit emerging market currencies,” said Amit Pabari, MD, CR Forex Advisors.

In the short term, Pabari expects USDINR to remain range-bound between 83.80 and 84.05.

“Looking further ahead, the outlook for the Rupee brightens, with substantial inflows expected to hit the market. This could push the USDINR pair to trade between 83.50 and 84.05, with a possible bias toward the lower end of the range,” Pabari said.

Meanwhile, crude oil prices eased on Friday after a rally the previous day, but prices remained set for a second straight weekly gain. Brent crude, the international benchmark, eased 0.09% to $79.33 a barrel. Brent oil prices have rallied more than 10% in October so far.

In the domestic equity market, the 30-share BSE Sensex was down 259.05 points, or 0.32%, at 81,352.36, while Nifty 50 fell 67.40 points, or 0.27%, to 24,931.05.

Foreign Institutional Investors (FIIs) were net sellers in the Indian stock market on Thursday, as they offloaded shares worth ₹4,926.61 crore, according to exchange data.

(With inputs from Reuters)

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