MUMBAI: The rupee closed at a record low of 85.77 against the dollar on Friday, marking the ninth straight week of losses. The decline is due to the depreciation of the Chinese yuan, which weakened to the 7.3 mark as the dollar rose.
The rupee touched its lowest intraday level of 85.80, before settling at 85.77 – 2 paise below its previous close.
Meanwhile, the country’s foreign exchange reserves fell for the fourth straight week and hit an eight-month low of $640.3 billion as of December 27. Foreign currency assets decreased by $4.6 billion to $551.9 billion. However, gold reserves increased by $541 million to $66.3 billion. Special Drawing Rights (SDRs) declined by $12 million to $17.9 billion, while India’s reserve position with the IMF remained unchanged at $4.2 billion.
The rupee depreciated by 0.2 percent during the week. Dollar index surpasses 109, rate cut expectations and strong US economy. Despite some softening, the rupee remained under pressure. Crude oil prices. Brent crude fell 0.4 percent to $75.60 a barrel.
With the US jobs report due next Friday and inflation data due on January 15, traders are focusing on the impact of US economic data. Analysts predict that the rupee may touch 86/$ in the short term.
Dealers said corporates were buying on a weakening dollar while the RBI was ensuring that there was ample supply of the greenback at higher levels. Jatin Trivedi of LKP Securities noted the strong dollar index and rising crude oil prices, both of which are putting pressure on the rupee.