Rupee Hits Lifetime Low at 83.33 Against US Dollar: Factors Behind the Devaluation Explored

10-11-2023 : The Indian rupee experienced a decline of 4 paise, settling at its all-time low of 83.33 (provisional) against the US dollar on Friday. This depreciation was attributed to the upward movement in crude oil prices and the outflow of foreign capital. Forex traders noted that investors were eagerly anticipating domestic industrial output and inflation data, while the weak American currency overseas and positive signals from equity markets contributed to the overall market sentiment.

Opening at 83.28 at the interbank foreign exchange, the rupee faced an intra-day low of 83.49 against the greenback. Ultimately, it concluded at its record low of 83.33 (provisional), marking a 4-paise loss from its previous close. The currency’s previous lowest closing level was recorded at 83.32 against the dollar on September 18 this year, and on Thursday, it closed at 83.29.

Simultaneously, the dollar index, measuring the greenback’s strength against a basket of six currencies, exhibited a marginal decline of 0.02 percent, trading at 105.89. Global oil benchmark Brent crude futures observed a rise of 0.81 percent, reaching USD 80.66 per barrel.

On the domestic front, the BSE Sensex closed 72.48 points or 0.11 percent higher at 64,904.68 points, while the broader NSE Nifty advanced 30.05 points or 0.15 percent to 19,425.35 points. Foreign Institutional Investors (FIIs) were net sellers in the capital market on Thursday, offloading shares worth Rs 1,712.33 crore, according to exchange data. The dynamic interplay of these factors continues to shape the currency market, with global and domestic variables influencing the rupee’s performance against the US dollar.