In early Friday trade, the rupee fell 5 paise to a record low of 84.37 against the US dollar amid persistent foreign fund outflows and a weak trend in domestic equities.
Forex traders say the US Federal Reserve’s recent rate cut indicates a change in the global financial landscape. With Donald Trump’s tax and trade policies influencing global markets, volatility could again enter the rupee’s trajectory.
At the interbank foreign exchange, the rupee opened at 84.32 against the greenback, after which it further slipped to an all-time low of 84.37, up 5 paise from its previous close. On Thursday, the rupee had slipped 1 paisa to close at a fresh lifetime low of 84.32 against the US dollar.
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The focus would now shift to the Reserve Bank of India and how effectively the central bank can tackle the changing dynamics in the currency market. Only those players who can adapt quickly to the changing dynamics of the market will survive in the market,” said CR Forex Advisors Managing Director Amit Pabari.
At its recent monetary policy announcement, the US Fed cut its benchmark rate by 0.25 basis points, targeting a range of 4.5 percent to 4.75 percent. In its accompanying statement, the Fed sounded neutral-to-dovish with a balanced risk in inflation and employment.
