MUMBAI, 20 Jun (Commoditiescontrol): The Indian rupee plummeted to a record low of 83.62 against the US dollar on Thursday, driven by significant block deals and escalating geopolitical tensions. This decline follows the rupee's previous close at 83.4550 on Wednesday.
The slump in the rupee's value is partly attributed to record block deals worth ₹23,000 crore executed on Wednesday. Notably, UK-based Vodafone Group's sale of its 18% stake in Indus Towers for Rs 15,300 crore accounted for a substantial portion of these transactions. An executive with a treasury advisory firm noted that the $2 billion outflow from the Indus Towers deal likely contributed to the rupee's decline.
Geopolitical tensions also played a role in the increased demand for the US dollar, exerting pressure on the Indian currency. Foreign portfolio investors (FPIs) and the oil industry emerged as significant buyers of the greenback, further driving the rupee down. Additionally, the dollar index (DXY), which measures the dollar's strength against a basket of six major currencies, rose to 105.47, up by 0.21 points or 0.20%.
A recent incident involving the alleged sinking of a second cargo ship by Yemen's Houthi militants in the Red Sea has heightened tensions along the vital maritime trade route, exacerbating the stress on the rupee.
Despite the Reserve Bank of India's (RBI) repeated interventions through state-run banks to curb rupee depreciation, no such support was observed on Thursday, leading to the rupee's record low. A foreign exchange trader at a state-run bank confirmed the absence of RBI's dollar offers on the day.
The broader strength of the US dollar, coupled with the weakness of the Chinese yuan, added to the rupee's woes during the trading session.The last time the rupee closed at 83.61 against the dollar was on April 16 of this year. As the rupee continues to face downward pressure from international developments and a firm US dollar, market participants will be vigilant about upcoming economic indicators and geopolitical events.
Analysts pointed out that the rupee's depreciation was influenced by the robust US dollar and mixed to weak performance in Asian markets. They indicated that traders would be closely monitoring US economic data, including weekly unemployment claims, building permits, the Philly Fed manufacturing index, housing starts, and current account data. The USD-INR spot price is projected to fluctuate within the range of Rs 83.30 to Rs 83.80.
(By Commoditiescontrol Bureau; +91 98201 3018)
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