Worst month for Rupee in 3 years; RBI intervenes, halts 92 breach

Mumbai: The rupee slipped to a record low in late trade on Friday, capping its worst monthly performance since Sept 2022, as persistent foreign portfolio outflows and strong corporate dollar demand continued to weigh on the currency despite intervention in the forex market.The rupee fell nearly 210 paise in Jan. The local unit touched an all-time low of 91.99 against the dollar during the session, and closed at 91.98, down two paise from its previous close of 91.96. Intervention by Reserve Bank of India helped the currency hold below the psychologically important 92-per-dollar level, though dealers said risks of gradual depreciation remain.

Market pressure on the currency has been sustained by weak foreign capital inflows, elevated importer and corporate hedging demand, and strong dollar buying linked to bullion imports. Foreign investors sold about $4 billion worth of domestic equities in Jan, following nearly $19 billion of outflows last year.During the session, the rupee was caught between a firmer dollar and intervention, which limited the impact of weaker domestic equities. It traded at 91.95 per dollar in the first half, marginally stronger than the previous close, before slipping to its record low later in the day. In the international markets the dollar gained 0.4%.