The Indian rupee opened slightly stronger on Monday but remained past the 84-mark.
The unit appreciated by 2 paise to 84.05 against the US dollar, after closing at 84.07 on Friday. This comes after the currency touched an all-time low of 84.09 in the previous session, according to Bloomberg data.
Despite the marginal improvement, the rupee remains under pressure. The Reserve Bank of India allowed the rupee to breach the critical 84.00 mark on Friday, noted Anil Kumar Bhansali, head of treasury and executive director at Finrex Treasury Advisors LLP.
“This move makes the rupee vulnerable to further dollar buying by foreign portfolio investors and oil companies,” Bhansali said, warning that the currency could gradually slide toward 84.25, despite higher inflows.
The upcoming Hyundai IPO is unlikely to attract significant foreign investment, according to him. “With a US holiday today (Columbus Day), cash demand for the dollar-rupee pair may be subdued,” Bhansali said.
Indian equities saw significant outflows in October, with foreign institutional investors offloading nearly $6.4 billion as market sentiment shifted to a risk-off mode, according to Amit Pabari, managing director of CR Forex Advisors.
Compounding the rupee’s woes, crude oil prices have surged by nearly 10%, driven by Hurricane Milton’s impact on US oil production and rising geopolitical tensions between Israel and Iran in the Middle East.
