Pressure on the Indian rupee increased against the US dollar on Friday. The rupee fell five paise to its new all-time low of 84.37 (provisional) against the US dollar at the interbank foreign exchange market on October 8. Forex traders said the recent decision by the US Federal Reserve to cut interest rates signals a change in the global financial scenario. Also, the global market may be affected due to Donald Trump's tax and trade policies, which may again lead to instability in the rupee.
Touched a low of 84.38
According to the news, the rupee opened at 84.32 per dollar in the interbank foreign exchange market. After hovering between a high of 84.31 and a low of 84.38 during trading, it finally closed at 84.37 per dollar (provisional) with a fall of five paise. On Thursday, the rupee had fallen by one paise to close at an all-time low of 84.32 against the US dollar.
What do experts say
Anuj Chaudhary, research analyst at Sharekhan by BNP Paribas, said the rupee fell to a record low due to selling in the domestic markets and continuous withdrawal of foreign funds. Apart from this, the rise in crude oil prices also put pressure on the rupee. He said there is a fear that the rupee will trade with a negative bias due to the overall strength of the dollar and weak domestic markets. FII withdrawals may also put pressure on the rupee. However, any intervention from the Reserve Bank can support the rupee at lower levels.
Fed Reserve's rate cut
The dollar weakened after the US Federal Reserve cut interest rates by 0.25 percent in line with market expectations. Federal Reserve Chief Jerome Powell said the US economy is strong and some downside risks have reduced. In its latest monetary policy announcement, the US Federal Reserve cut its benchmark rate by 0.25 per cent to a target range of 4.5 per cent to 4.75 per cent. The local currency has weakened by 28 paise against the dollar in the last three sessions.
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