MUMBAI: The Indian rupee ended at a record closing low on Friday, pressured by a decline in the Chinese yuan, and logged a ninth straight week of losses due to the relentless rise in the US dollar.
The rupee ended at 85.77 to the dollar, compared to its previous close of 85.7525. The local unit declined 0.2% for the week. China’s yuan slid past the key 7.3 threshold to a 14-month low against the dollar on Friday as crumbling yields, rate cut expectations and the threat of tariffs from incoming US President-elect Donald Trump’s administration dented sentiment.
The Chinese currency closed the onshore trading session down 0.14% at 7.3093 on Friday, its weakest level since Nov. 3, 2023. Other Asian currencies were broadly lower.
“A slide in the yuan exacerbated the rupee’s woes,” a trader at a private bank said.
The Reserve Bank of India’s (RBI) likely dollar sales have prevented the rupee’s decline below its record low of 85.8075 hit last week, traders said.
The currency has been under pressure over the past few weeks due to a broad dollar rally.
The dollar index climbed to its highest in more than two years in New York trade on Thursday and is on track for its best weekly performance in over a month.
Expectations of fewer Federal Reserve rate cuts this year and the view that the US economy will continue to outperform the rest of its global peers has kept the dollar well bid.
Investors will now watch out for the December US jobs report, due next Friday, and US inflation data, which will be out on Jan. 15.
The rupee may touch the 86-per-dollar mark in the short term, said Jigar Trivedi, a senior analyst at Reliance Securities, who recommends buying the dollar-rupee pair on every dip.
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