MUMBAI: The Indian rupee hit an all-time low on Thursday amid heightened dollar demand likely spurred by the maturity of positions in the non-deliverable forwards market, while a prevailing bearish bias on the currency also weighed.
The rupee fell 0.1% to 87.55, eclipsing its previous record low of 87.4875 hit on Wednesday.
Dollar sales by state-run banks though, most likely on behalf of the Reserve Bank of India, helped limit its losses, three traders told Reuters, including one directly familiar with the matter.
The offers from state-run banks are “quite strong,” but the dollar buying pressure is persistent as well, one of the traders said.
Weaker dollar, dip in US yields of no help to Indian rupee
The daily dollar-rupee reference rate was quoted at a premium of 0.50/0.60 paisa, signalling heightened demand for the greenback.
The rupee has been stuck in a dogged downtrend over the last few months amid a paucity of portfolio inflows, uncertainty of U.S. President Donald Trump’s tariff policies and, more recently, expectations of rate cuts by the Reserve Bank of India.
The rupee has declined about 2% this year so far, and is the worst performer among Asian currencies.
American Dollar Exchange Rate