Rupee falls 11 paise to close at record low of 85.75 against US dollar

     Mumbai, Jan 2 (PTI) The rupee depreciated 11 paise to close at a record low of 85.75 against the US dollar on Thursday, as strong dollar demand from importers and foreign fund outflows dented investor sentiments.
     Forex traders said the dollar gained against most currencies during 2024 and continued to remain on a strong footing this year. Moreover, persistent foreign fund outflows further dented investors' sentiments.
     Additionally, global markets are expected to see low volumes as the holiday season is underway in major economies like those in Europe.
     At the interbank foreign exchange, the rupee opened on a weak note and sank to an intra-day low of 85.79 while registering a high of 85.68 against the American currency. The local unit settled for the day at a record low of 85.75, registering a fall of 11 paise over its previous close amid a sharp recovery in domestic equities.
     On Wednesday, the rupee settled flat at 85.64 against the US dollar.
     On December 27, the local currency touched its lifetime intra-day low of 85.80 against the greenback.
     "We expect the rupee to trade with a negative bias on strength in the US Dollar and dollar demand from importers. Sustained FII outflows may further pressure the rupee," said Anuj Choudhary -- Research Analyst at Mirae Asset Sharekhan.
     "However, any intervention by the Reserve Bank of India (RBI) may support the rupee at lower levels. USDINR spot price is expected to trade in a range of 85.50 to 86, Choudhary added.
     Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading 0.02 per cent lower at 108.46.
     Brent crude, the global oil benchmark, rose 0.91 per cent to USD 75.32 per barrel in futures trade.
     Meanwhile, India's manufacturing sector growth fell to a 12-month low in December, as new business orders and production expanded at softer rates, a monthly survey said on Thursday.
     The seasonally adjusted HSBC India Manufacturing Purchasing Managers' Index was at 56.4 in December, down from 56.5 in November, indicating a weaker improvement in operating conditions.
     In the domestic equity market, the 30-share BSE Sensex settled at 1,436.30 points, or 1.83 per cent, up at 79,943.71 points, while the Nifty was higher by 445.75 points, or 1.88 per cent, to 24,188.65 points.
     Foreign Institutional Investors (FIIs) purchased Rs 1,506.75 crore in the capital markets on a net basis on Thursday, according to exchange data.
     "The Indian rupee is expected to open flat but USD will continue to be well bid on all its downside as demand for USD continued to be robust... The range for the day is expected between 85.50/80. A close watch on the liquidity position is to be made as premiums in the near term remain on the higher side," Anil Kumar Bhansali, Head of Treasury and Executive Director, Finrex Treasury Advisors LLP, said.

(This story has not been edited by THE WEEK and is auto-generated from PTI)