The Indian currency is continuously weakening against the US dollar. The rupee weakened further on Friday and fell to its lowest level ever. The rupee closed at a record low of 85.50 (provisional), down 23 paise against the US dollar due to the strong dollar. According to PTI news, analysts say that the Reserve Bank's stance of holding dollar payments in short-term forward contracts has further aggravated the dollar shortage, as importers rush to meet their payment obligations at the end of the month.

fell to its lowest intraday level

According to the news, experts say that despite strong sentiment in the domestic equity markets, the rupee came under pressure due to continued outflow of foreign funds and rising crude oil prices. The rupee opened weak at 85.31 in the interbank foreign exchange market and fell 53 paise to an all-time low intraday level of 85.80. Finally, the rupee closed at 85.50 (provisional) against the dollar. Earlier, the sharpest fall of 68 paise in a day in the rupee was recorded on February 2, 2023.

Rupee is touching new lows almost every day

The rupee has been hitting new lows almost every day in the past few weeks. The Indian currency fell 12 paise to 85.27 against the dollar on Thursday after falling 13 paise in the previous two sessions. Amit Pabari, MD, CR Forex Advisors, said the central bank has USD 21 billion in short-side forward contracts maturing in December and January. Market speculation suggests that the RBI has refrained from rolling over these maturing forwards, leading to a shortage of dollars and an excess supply of rupees. Dollar liquidity in the market remains very low.

This is the estimate of spot price

According to Anuj Chaudhary, Research Analyst at Mirae Asset Sharekhan, the rupee hit a record low due to month-end dollar demand from importers and withdrawals by foreign investors (FIIs). Rising US Treasury yields and crude oil prices have also put pressure on the rupee. USD-INR spot price estimated to be in the range of Rs 85.30 to Rs 85.85. Meanwhile, the dollar index, which measures the greenback's strength against a basket of six currencies, was trading 0.04 per cent higher at 107.94, while the 10-year benchmark US Treasury yield rose 0.76 per cent to its seven-month high.