Forex traders said the rupee fell to a new all-time low of 90.48 after Chief Economic Advisor V Anantha Nageswaran reportedly said the India-US trade deal is likely to be inked by March.
Moreover, prevailing risk-averse market sentiment, compounded by strong US dollar demand from importers, dented investor sentiment.
At the interbank foreign exchange, the rupee opened at 89.95 against the US dollar, then lost ground and fell to a record intra-day low of 90.48, registering a 54-paise decline from its previous close.
On Wednesday, the rupee settled at 89.87 against the US dollar.
“Rupee fell to a new all-time low of 90.4825 after CEA said trade deal is likely by March. Also, Mexico said it will put tariffs upto 50 per cent on goods from Asian countries, including India. FPIs also sold debt as yields rose.
“US and Japan far-term yields were also up and not helping the rupee,” said Anil Kumar Bhansali, Head of Treasury and Executive Director Finrex Treasury Advisors LLP.Meanwhile, US Trade Representative (USTR) Jamieson Greer has said the US has received the “best” ever offers from India on the proposed trade agreement amid commencement of two-day talks here between the two countries.
Speaking at a Senate Appropriations Subcommittee hearing on Tuesday in Washington, Greer said there is resistance in India to certain row crops and other meat and products. Row crops in the US include corn, soybeans, wheat and cotton.
These remarks are important as both sides are trying to conclude the first phase of the proposed Bilateral Trade Agreement (BTA).
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.17 per cent lower at 98.61, after the FED cut rates and gave a not-so-hawkish guidance.
Brent crude, the global oil benchmark, was trading 1.17 per cent lower at USD 61.48 per barrel in futures trade.
On the domestic equity market front, the 30-share benchmark index Sensex was trading 443.66 points higher at 84,834.93, while the Nifty was up 141.05 points at 25,899.05.
Foreign institutional investors sold equities worth Rs 1,651.06 crore on Wednesday, according to exchange data.
