Indian rupee hits new record low, ends 2 paise down amid persistent FII selling in equities

Indian rupee

Indian rupee has hit a new record low on September 30 before ending 2 paise down amid persistent selling by foreign investors from equities and caution ahead of the Reserve Bank of India's Monetary Policy Committee's decision on the rate front, currency experts said.

The domestic currency hit a record low of 88.8850 against the US dollar, and then ended at 88.7888 against the greenback, as compared to 88.7612 at the previous close.

“FPIs have been constant sellers in the equity market and have been buying dollars. There has been no major inflow, and whatever inflow is there gets absorbed by the buying. The tariff issue and visa issue are causing the selling in equities and dollar buying in the past five months, thus making it the fifth consecutive monthly fall,” said Anil Kumar Bhansali, Head of Treasury at Finrex Treasury Advisors LLP.

Foreign investors have been net sellers in the equity market due to tariff worries and the Visa fees issue. Sustained selling by foreign investors is also contributing to the bearish sentiment on markets, which have been falling for the past seven sessions.

Further, experts said that traders are cautious ahead of RBI’s monetary policy scheduled to be announced on October 1. MPC is likely to maintain the status quo on interest rates in its October review, a Moneycontrol poll of 15 economists, bank treasury heads and fund managers has found.

“With the policy outcome in focus, traders are likely to remain cautious, and the rupee range is expected between 88.45–89.15,” said Jateen Trivedi, VP Research Analyst - Commodity and Currency, LKP Securities.

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