Rupee hits record low, falls for fifth day; more pain ahead?

The Indian rupee slipped to a record low of Rs 89.92 against the US dollar on Tuesday, slipping 35 paise from the previous close of 89.57. On Monday, rupee fell to a low of Rs 89.83 against the US dollar. This is the fifth straight session of fall for the Indian currency amid high demand for dollar and a delay in the India-US trade deal.  

Dilip Parmar – Senior Research Analyst, HDFC Securities said, "The Indian rupee's decline is fuelled by strong market demand for the dollar coupled with constrained supply. The sustained weakness is primarily attributable to a widening trade deficit, the delayed India-US trade deal, and limited intervention from the central bank. The rupee is likely to remain under pressure versus the US dollar for the coming days, as the underlying imbalance between demand and supply for the US Dollar is likely to persist. In the near term, spot USD-INR has resistance at 89.95 and support at 89.30" .

With today's decline, the rupee has fallen 4.84% this year.  The Indian currency is down 6.28% in the last one year. 

The rupee fell in line with Indian equities, which were trading lower in early deals today. Sensex slipped 351 points  to 85,290 in early trade. The NSE Nifty50 was down 106 points, or 0.41 per cent, at 26,070, after briefly touching a low of 26,046.  

Among Sensex constituents, HDFC Bank led the losers, falling 1.32 per cent to Rs 989.30. ICICI Bank shares slipped 0.83 per cent, while Eternal, Axis Bank, and Tata Steel dropped 0.61 per cent, 0.30 per cent, and 0.30 per cent, respectively.