The domestic currency had gained by 80 paise, or 1.19 per cent, in previous five trading days.
For the first time, the rupee declined to the low level of 80 against the US dollar in intra-day spot trading on Monday before ending the session 16 paise lower at 79.98 amid a surge in crude oil prices and unrelenting foreign fund outflows. At the interbank forex market, the local unit opened at 79.76 against the greenback but lost ground to touch the psychological low mark of 80 against the American currency. The local unit clawed back some lost ground and closed at 79.98, registering a fall of 16 paise over its previous close.
The rupee had gained 24 paise to close at nearly one-week high of 60.95 against the dollar yesterday following selling of the US currency by exporters and some banks, amid sustained heavy capital inflows.
Forex dealers said besides dollar's gains against other currencies, fresh demand for the American unit from importers and a weak opening in the domestic equity market put pressure on the rupee.
At lower levels, a supportive buying in dollar forced rupee to depreciate since opening trade
Ongoing trade-war rhetoric between the US and China added some nervousness on the trading front coupled with extremely bullish dollar sentiment overseas.
The 50-stock NSE barometer Nifty finished 14.75 points, or 0.14 per cent, down at 10,382.70 after shuttling between 10,340.65 and 10,393.15.
The Indian rupee was off to a bad start in the new year as it suffered the worst single-day drop in over two weeks today by falling 32 paise to end at 63.35 against the US dollar.
The latest macro-data from India is disquieting
India Ratings principal economist Sunil Kumar Sinha said the Brexit is a mixed bag for the country.
The Indian rupee is expected to trade between 80 and 84 against dollar in the first three months of 2023 with support from overseas inflows though worsening current account deficit (CAD) and reduced interest rate differential between the US and India pose challenges. According to a Business Standard Poll of 10 participants, most said the rupee could gain strength in January due to foreign inflows, and the Reserve Bank of India (RBI) is not expected to allow the currency to depreciate ahead of the Union Budget scheduled on February 1. The rupee depreciated 10.15 per cent in 2022, its worst performance since 2013 as the war in Europe and the interest rate increase by the US Federal Reserve prompted investors to flee emerging markets.
'The prospects for both India and the global economy is that we are headed towards a very difficult time.' 'I see very uncertain at least 8-10 months for both India and the rest of the world.'
The rupee plunged 90 paise to close at an all-time low of 80.86 (provisional) against the US dollar on Thursday after the US Federal Reserve's interest rate hike and its hawkish stance weighed on investor sentiments. Forex traders said the US Fed's rate hike and escalation of geopolitical risk in Ukraine sapped risk appetite. Moreover, the strength of the American currency in the overseas market, a muted trend in domestic equities, risk-off mood and firm crude oil prices weighed on the rupee.
Forex dealers said besides increased dollar selling by exporters, strength in other currencies against the American currency overseas also supported the rupee but a lower opening of the domestic equity market capped the gains.
The rupee snapped its two-day winning run against the dollar.
Economists and experts have suggested that the central bank should intervene in the Indian forex market to halt the sharp depreciation in rupee value.
Sharp rate hike in Russia further raised concerns about the global economy.
Macroeconomic factors under control, says Rajan
India's forex reserves recently declined by $704 million to $354.517 billion.
Reserves had touched an all-time high of $355.46 billion in the week to June 19.
Sustained demand for the dollar is the reason.
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The rupee gained 8 paise to close at over two-week high of 61.23 against the US dollar in the previous session.
As they feel that the rupee may depreciate to 43.75 levels over the next six months.
Reserve Bank has discreetly phoned trading desks with unusually explicit messages to cut their speculative positions in the currency.
Rupee weakened by 10 paise to end at 66.14 against the dollar due to month-end demand from importers and banks.
As the Indian currency hovers around its lowest versus the US greenback, several smaller and mid-sized companies are expected to face rough weather as almost 44 per cent of the foreign loans taken by Indian companies remained unhedged. According to the data sourced from the Reserve Bank of India, Indian companies raised around $38.2 billion in the financial year ended in March. Of this, only 56 per cent of the loans are hedged while the rest of the foreign loans remain unhedged, thus risking the companies to forex volatility.
The rupee continued its downslide for the second session in a row, depreciating by 20 paise to close at more than one-week low of 62.51 against the greenback.
Foreign investors keeping off; inflows into bonds also likely to improve if RBI resumes rate cuts.
Shares of most of the Adani group firms ended lower on Monday, with the group companies' combined mcap witnessing a sharp fall of Rs 9.5 lakh crore after US-based short-seller Hindenburg Research's adverse report.
The year 2015 may well turn out to be a watershed in global macroeconomic adjustment.
The rupee depreciated 6 paise to 77.50 against the US dollar in the opening trade on Wednesday as a surging American currency in the overseas markets and persistent foreign fund outflows weighed on investor sentiment. Besides, rising global crude prices impacted the domestic unit, forex traders said. However, a higher opening in the domestic equity market restricted the rupee's fall, they added.
The US dollar index, which tracks the greenback against a basket of six major currencies, was 0.38 per cent lower at 95.41.
A fall in the rupee could boost exports. But the flip side of the equation is that a weaker rupee could stoke some inflation
The Congress released a booklet 'Nau saal, Nau sawaal', asking nine questions from Modi. The BJP rejected the Congress' criticism as a 'bundle of lies and mountain of deception' and said the questions are born out of 'pathological hatred' of the PM.
There are some advantages of a falling rupee.
'The reform agenda is progressing in the right direction'.
RBI would get the comfort of meeting its 8 per cent January Consumer Price Index-based inflation target, BofA-ML said, adding that 'we expect the RBI to cut 75 bp in 2015 from February with inflation on course to 6 per cent in January 2016'.
'When the rupee was at 65 a dollar, we wanted to go to Thailand for a holiday.' 'Now at 72, we may find Goa much more attractive.' 'That's how correction happens.' 'If you don't let that correction happen, then it's a pressure cooker that bursts one day.'
'Today, there is no easy money to be made after the run-up in equities.'
'You can put 25 per cent right now; put another 25 per cent when Nifty corrects another 500 points.' 'At 13,500 put another 25 per cent and at 13,000 one can get fully deployed.'
