Rupee falls to lifetime low against the US dollar amid elevated crude oil prices, FII selling

Indian rupee depreciated to a record low on Monday, following weakness in Asian peers, weighed down by elevated crude oil prices and strong US dollar. The local currency dipped to a lifetime low of 84.0725 to the US dollar, inching past the prior low of 84.07 hit on Friday.

The rupee opened flat at 84.05 per US dollar on Monday as against Friday’s close of 84.06.

The dollar index, which gauges the greenback's strength against a basket of six currencies, was trading 0.13% higher at 103.02.

The depreciation in rupee comes on the back of persistent outflow of foreign funds from Indian markets and high crude oil prices that have surged by nearly 10% recently, analysts said.

Indian equities saw substantial outflows, with FIIs offloading nearly $6.4 billion in October, as risk-off sentiment gripped the markets.

Additionally, crude oil prices have surged by nearly 10%, fueled by Hurricane Milton’s impact on US production along with the tensions in the Middle East between Israel and Iran.

“While these factors have weighed heavily on the Rupee, the Reserve Bank of India's intervention, backed by record-high reserves, and strong resistance at the 84.10 level could trigger a pullback below 84 as FII outflows begin to ease. Thus, in the short term we expect the USDINR pair to trade in a range of 83.90 to 84.10,” said Amit Pabari, MD, CR Forex Advisors.

India's forex reserves dropped by $3.709 billion to $701.176 billion for the week ended October 4, the RBI said on Friday.

Brent crude, the global oil benchmark, was trading 1.20% lower at $78.09 per barrel.

On the domestic equity market front, Sensex surged 428.67 points, or 0.53%, to 81,810.03, while the Nifty 50 gained 129.90 points, or 0.52%, to 25,094.15.

On Friday, foreign institutional investors (FIIs) were net sellers in the capital markets as they offloaded shares worth ₹4,162.66 crore, according to exchange data.

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