Rupee slumps 28 paise to 90.43 against US dollar in early trade

The rupee slumped 28 paise to an alltime low of 9043 against the US dollar in early trade on Thursday amid substantial foreign institutional investor outflows and restrained intervention from the Reserve Bank of IndiaForex traders said that restrained central bank intervention ahead of the crucial Monetary Policy Committee MPC decision and significant dollar demand from importers have exerted persistent downward pressure on the local currencyAt the interbank foreign exchange market the rupee opened at 9036 It slipped further to a record low of 9043 against the greenback in initial deals registering a loss of 28 paise from its previous closing levelOn Wednesday the rupee breached the 90adollar level for the first time to settle at a fresh alltime low of 9015 against the greenbackMeanwhile Chief Economic Adviser V Anantha Nageswaran on Wednesday said the falling rupee is not affecting inflation or exportsA falling rupee helps outward shipment but makes imports costlierImportdependent sectors such as gems and jewellery petroleum and electronics may see lower benefits due to a rise in input costs putting pressure on inflationary expectations he said at an event on WednesdayMeanwhile the dollar index which gauges the greenbacks strength against a basket of six currencies was trading 014 per cent higher at 9899Brent crude the global oil benchmark rose 049 per cent to USD 6298 per barrel in futures tradeForex traders believe investors are adopting a cautious stance amid ongoing trade tensions with the US with expectations of a settlement towards the end of the yearIt seems that until the trade deal comes we may see the rupee weaken further and it may reach the levels of 9100 soon With a weak rupee we do not expect the RBI to cut rates on Friday said Anil Kumar Bhansali Head of Treasury and Executive Director Finrex Treasury Advisors LLPOn the macroeconomic front Indias GDP has already surprised on the upside and the latest HSBC India Services PMI a key index that measures whether businesses are growing or slowing rose to 598 in November supported by strong new ordersBut the currency market isnt trading on growth headlines anymore It wants stability clear policy guidance and maybe a trade deal that doesnt keep slipping away CR Forex Advisors MD Amit Pabari saidPabari further added that now all eyes turn to RBI Governor Sanjay Malhotra on December 5 Investors arent just listening to rate decisions They want to hear his voice on the rupeeThe decision of the RBI Governor Sanjay Malhotraheaded sixmember ratesetting panel will be announced on FridayThe meeting is taking place against the backdrop of falling inflation rising GDP growth the rupee crossing 90 against the dollar and ongoing geopolitical tensionsOn the domestic equity market front Sensex rose 4599 points to 8515280 in early trade while Nifty was up 1435 points to 2600035Foreign institutional investors sold equities worth Rs 320692 crore on a net basis on Wednesday according to exchange dataThis story has been sourced from a third party syndicated feed agencies Midday accepts no responsibility or liability for its dependability trustworthiness reliability and data of the text Midday managementmiddaycom reserves the sole right to alter delete or remove without notice the content in its absolute discretion for any reason whatsoever