On July 24, the Rupee depreciated two paise to hit its all-time closing low of 83.71 against the U.S. dollar.
| Photo Credit: The Hindu
Rupee opened on a muted note and fell to an all-time low of 83.72 against the U.S. dollar on July 25, dragged down by the strength of the American currency in the overseas market and significant foreign fund outflows.
Forex traders said the fall in the domestic unit came on the heels of a significant downturn in the Indian equity markets, sparked by the government’s decision to hike the tax rate on capital gains.
At the interbank foreign exchange market, the local unit was trading in a narrow range. It opened at an all-time low of 83.72 against the American currency, registering a fall of one paisa from its previous close.
Budget 2024 highlights: Focus on employment, skilling, MSME and middle class; tax structure under new regime revised
On July 24, the Rupee depreciated two paise to hit its all-time closing low of 83.71 against the U.S. dollar. The government’s decision to hike the tax rate on capital gains dampened market sentiment, exerting immense pressure on the Rupee and the equity market.
“Post-Budget day, the benchmark Indian equity indices, BSE Sensex and Nifty 50, dipped by approximately 0.3% and 0.2%, respectively, as foreign institutional investors withdrew a staggering $350 million from Indian stocks.
Watch: Union Budget 2024-25 | Key Highlights
“Adding to the turmoil, persistent high demand for dollars, driven by defence and oil payments, compounded the currency’s woes,” CR Forex Advisors MD Amit Pabari said.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was at 104.21, lower by 0.17%. Brent crude futures, the global oil benchmark, fell 0.75% to $81.10 per barrel.
In the domestic equity market, the 30-share BSE Sensex was trading 425.14 points or 0.53% lower at 79,723.74 points. The broader NSE Nifty was down 120.65 points or 0.49% to 24,292.85 points.
Foreign Institutional Investors (FIIs) were net sellers in the capital markets on July 24 as they offloaded shares worth ₹5,130.90 crore, according to exchange data.
