Rupee’s decline continues: Currency closes at record low of 90.97 against US dollar; depreciates by 7 paise

The Indian rupee weakened by 7 paise on Tuesday, closing at a record low of 90.97 against the US dollar. This comes as strong dollar demand from metal importers and continued foreign fund outflows weighed on investor sentiment.Forex traders said that the rising geopolitical uncertainties, including fresh US expansionary signals, have increased risk aversion and put pressure on emerging market currencies. A sluggish domestic equity market, triggered by heavy foreign capital outflows, further dented the local unit.At the interbank foreign exchange, the rupee opened at 90.91, touched an intraday low of 91.06 and settled at 90.97 (provisional) against the American currency, as reported by news agency PTI. On Monday, it had depreciated by 12 paise to close at 90.90. The previous record low closing was 90.93 on December 16 last year while the intraday low stood at 91.14.“The Indian rupee traded with a negative bias and slipped below the 91-mark on risk aversion in global markets and persistent FII outflows. However, a weak dollar and intervention by the RBI prevented a sharp fall,” said Anuj Choudhary, Research Analyst at Mirae Asset ShareKhan.Choudhary added that uncertainty over trade deals and the US stance on Greenland could keep the rupee under pressure.“However, a weak dollar and any RBI intervention may support the rupee at lower levels. USD-INR spot price is expected to trade in a range of 90.70 to 91.25,” he said.The dollar index, measuring the greenback’s strength against a basket of six currencies, was 0.91 per cent lower at 98.48. Brent crude futures traded at USD 63.94 per barrel.On the domestic front, the Sensex tumbled 1,065.71 points to 82,180.47, while the Nifty lost 353 points to 25,232.50. Foreign institutional investors offloaded equities worth Rs 3,262.82 crore on Monday, according to exchange data.