Rupee extends slide, hits new record low of 91.05 against US dollar

Rupee extends slide, hits record low of 90.89 against US dollar

The rupee extended its slide on December 16 by trading at new record low of 91.05 against US dollar on continuous headwinds such as lack of clarity on the progress in trade deal with the US and persistent capital outflows.

The pressure is also piling up due to widening trade deficit and a depreciation bias is encouraging importers to step up hedging, leaving exporters reluctant to add dollar supply, experts said .

The currency opened at 90.79 against the US dollar after falling to a new low of 90.785 before closing at 90.73 in the previous session. At 11:30 am, the domestic currency was trading at 91.05, down 0.34%.

Rupee depreciated from 90/$ to 91/$ in 5 sessions. The domestic currency lost 2% in the past one month.

"That confidence gap largely stems from one unresolved issue, the India-US trade deal. While there has been no fresh economic shock, the lack of clarity continues to weigh on sentiment," said Amit Pabari, managing director at CR Forex Advisors.

Experts said traders will watch out for USD/INR Buy/Sell Swap auction to be held later in the day, which will enhances the RBI’s ability to sell dollars and manage volatility, making the move supportive rather than disruptive.

On December 15, the currency slipped to fresh record low of 90.7850, extending its year-to-date decline to about 6 percent before ending the session slightly higher at 90.73.

"In the very near term, 90.00–90.20 remains a strong support zone, while 90.80–91.00 acts as a key resistance area," Pabari added.