New Delhi
\nThe Indian rupee declined to its weakest level on record on Friday, pressured by dollar demand from local oil companies, custodial banks and tepid risk sentiment. The rupee was at 83.7175 against the US dollar as of 10:35 a.m. IST, having slipped to a record low of 83.7250 in early trade. The currency had closed at 83.6975 in the previous session.
\nThe rupee has weakened to record low levels in four of the five trading sessions this week.
\nThe declines came amid outflows from local equities, volatility in the Chinese yuan, and expectations that the Reserve Bank of India (RBI) may allow the currency to weaken slightly as it seeks to correct its overvaluation.
\nForeign investors have net sold about $1 billion worth of Indian equities since Tuesday, when the government decided to raise taxes on profits from equity investments and on equity derivative transactions.
\nThe dollar index was at 104.2 on Friday while Asian currencies were mixed, with the offshore Chinese yuan down 0.2% after rallying sharply on Thursday.
\nVolatility in the yuan may pose a risk to carry trades between the Chinese and local currency, adding pressure on the rupee.
\nThe rupee is expected to keep drifting lower steadily with the RBI likely to continue intervening to manage the pace of depreciation, traders said.
\nMeanwhile, data released on Thursday showed that the US economy grew more than expected in the April-June quarter but inflation pressures subsided.
\n\u201cWe continue to think that the Fed (Federal Reserve) will start its rate cut cycle from September, and this month\u2019s Fed meeting could be important to watch to see if there are any hints,\u201d Michael Wan, senior currency analyst at MUFG Bank, said in a note.<\/p>\n","protected":false},"excerpt":{"rendered":"
New Delhi The Indian rupee declined to its weakest level on record on Friday, pressured by dollar demand from local oil companies, custodial banks and tepid risk sentiment. The rupee was at 83.7175 against the US dollar as of 10:35 a.m. IST, having slipped to a record low of 83.7250 in early trade. The currency […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6],"tags":[],"class_list":{"0":"post-420997","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-world"},"yoast_head":"\n