Rupee hits fresh record low of 90.56 against US Dollar

Rupee hits fresh record low of 90.55 against US Dollar

The Indian rupee hit a new record low on December 12, as sentiment remained bogged down by the absence of a trade deal with the US. Also, a stronger dollar and persistent foreign outflows kept pressure on the domestic currency.

The rupee weakened to 90.56 against the US dollar, slipping past its previous all-time low of 90.4675 hit on December 11. The currency was last at 90.4650, down 0.1% on the day.

At the interbank foreign exchange, the rupee opened at 90.43 against the US dollar, then fell further to 90.56 against the greenback, registering a fall of 24 paise from its previous close. Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading 0.02 per cent higher at 98.37.

Forex traders said rupee is under pressure largely due to aggressive dollar purchases from importers amid surging global prices for precious metals, reported PTI.

On December 11, the rupee had plunged 38 paise to close at an all-time low of 90.32 against the US dollar.

The rupee is Asia's worst performer this year. The currency has fallen nearly 6% against the dollar year-to-date, as steep U.S. tariffs of up to 50% on Indian goods hurt exports to its biggest market, while also diminishing the appeal of local equities for foreign investors.

With negotiations ongoing, Prime Minister Narendra Modi said he spoke with US President Donald Trump by phone on December 11, as New Delhi seeks relief from 50% U.S. tariffs.

"The rupee weakness has further to go if tariffs are here to stay. The expectations are currently one-sided explaining importer demand while exporters remain missing, plus the pressure from portfolio outflows," said Dhiraj Nim, an economist and FX strategist at ANZ.

"The RBI will be open to weakness but in a calibrated manner."

The currency's trade-weighted real effective exchange rate, which accounts for the variation in inflation with trading partners, declined to 97.47 as of October, RBI data showed. A reading below 100 signals undervaluation.

"For the day the range of 90 to 90.60 should be honored with a close watch on RBI. Today is also the last day of the talks between the Indian and visiting American delegation and we hope a deal is announced after that," said Anil Kumar Bhansali, Head of Treasury and Executive Director Finrex Treasury Advisors LLP.