Rupee drops 13 paise to all-time low of 84.73 against US dollar

Mumbai: The rupee depreciated 13 paise to close at an all-time low of 84.73 (provisional) against the US dollar on Monday, on disappointing macroeconomic data and broad strength of the American currency in the overseas markets.

Forex traders said Asian currencies were down after Trump Rhetoric on BRICs currency, as the move may further strengthen the greenback.

President-elect Donald Trump on Saturday threatened a 100 per cent tariff on the BRIC bloc of nations if they act to undermine the US dollar.

At the interbank foreign exchange, the rupee opened at 84.59 and touched the lowest level of 84.73 against the greenback during intra-day trade. The unit ended the session at an all-time low of 84.73 (provisional) against the dollar, registering a fall of 13 paise over its previous close.

On Friday, the rupee plunged 13 paise to settle at a fresh all-time low of 84.60 against the US dollar.

Traders said disappointing macroeconomic data and persistent foreign fund outflows also dented investor sentiments.

India's manufacturing sector growth fell to a joint 11-month low of 56.5 in November, restricted by competitive conditions and inflationary pressures amid a softer increase in factory orders, a monthly survey said on Monday.

"We expect the rupee to trade with a negative bias on strong dollar and FII outflows. A recovery in crude oil prices may also weigh on the rupee. Donald Trump's tariff threat may further strengthen the greenback," said Anuj Choudhary -- Research Analyst at Mirae Asset Sharekhan.

However, positive domestic markets may support the rupee at lower levels. Traders may take cues from US ISM manufacturing PMI data, Choudhary said, adding that USD-INR spot price is expected to trade in a range of Rs 84.50 to Rs 84.95.

The dollar index, which gauges the greenback's strength against a basket of six currencies, was trading higher by 0.51 per cent at 106.27.

Brent crude, the global oil benchmark, surged 0.99 per cent to USD 72.59 per barrel in futures trade.

India's forex reserves dropped USD 1.31 billion to USD 656.582 billion for the week ended November 22, the Reserve Bank of India (RBI) said on Friday.

The reserves had dropped a record USD 17.761 billion to USD 657.892 billion in the previous reporting week ending November 15.

On the domestic macroeconomic front, the latest government data released on Friday showed India's economic growth slowed to near two-year low of 5.4 per cent in the July-September period of this fiscal year due to poor performance of manufacturing and mining sectors as well as weak consumption.

On the domestic equity market front, the 30-share benchmark index Sensex closed 445.29 points, or 0.56 per cent higher, at 80,248.08 points. The Nifty rose 144.95 points, or 0.6 per cent, to 24,276.05 points.

Meanwhile, the central government's fiscal deficit at the end of the first seven months of the current financial year touched 46.5 per cent of the full-year target. The deficit stood at 45 per cent of the Budget estimates in the corresponding period of 2023-24.

Traders said the persistent selling pressure by foreign funds added further strain on the currency. Foreign Institutional Investors (FIIs) were net sellers in the capital markets on Friday, as they offloaded shares worth Rs 4,383.55 crore, according to exchange data.