The rupee closed below the 90-mark against the US dollar for the first time on December 3 on persistent equity outflows and uncertainty around the India-US trade deal, currency experts said.
The currency hit an all-time low of 90.29 against the dollar on Wednesday, before closing at 90.19, down nearly 0.4% on the day.
"USD/INR is expected to trade between 88.90 and 90.20. The 88.80–89.00 band continues to act as a firm support zone. A clean break below 89 would be the first real sign that the rupee is finally ready to pull back and gather strength," said Amit Pabari, managing director at CR Forex Advisors.
Stalled India-US trade talks and heavy FPI outflows are causing this fall despite the weakening of the dollar index, a currency expert said.
"If the RBI support eases at 90, then we could see 91 also in this cycle," said Anil Bhansali, head of treasury at Finrex Treasury Advisors.
The Reserve Bank of India’s monetary policy committee begins it meeting later in the day, with the interest rate decision to be announced on December 5. The meeting comes days ahead of the US Federal Reserve decision expected on December 10.
A rate cut by RBI could lead to further selling, but a weakened currency makes the MPC task difficult, Bhansali said.
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