Rupee plunges 60 paise to 85.83 to steepest one-day retreat in three months

Synopsis

A global retreat in crude oil prices to bear territory cushioned the rupee's fall, as did likely dollar sales by exporters and RBI to help the unit find a floor, traders said.

Mumbai The Indian rupee on Monday plunged 60 paisa, or nearly eight-tenth of a percentage point, against the dollar-its steepest one-day retreat in three months- to 85.83 in line with other Asian currencies roiled by tariffs, illustrating that Friday's gains past 85/$ for the first time this year would be temporary through what's turning out to be the worst for emerging markets assets in about three decades.

A global retreat in crude oil prices to bear territory cushioned the rupee's fall, as did likely dollar sales by exporters and RBI to help the unit find a floor, traders said.

The rupee had closed at 85.23 Friday, having earlier surged to 84.93 - the first such level for the unit in 2025.

The range for rupee was between 85.56 and 85.90 on Monday. Traders expect the rupee to trade between 85.50 and 86 Tuesday. The dollar index was at 102.9, up from 101.5 levels on Friday, while Asian currencies were weak by 1%, with Chinese yuan weaker by 0.4% - a near four month low, LSEG data showed.

“I expected the rupee to touch 86 levels, but that did not happen and the recovery seems to be good as there were dollar sales by exporters,” said Anil Bhansali, head of treasury, Finrex Treasury Advisors.

“In current market conditions where there is high volatility, the best way for both exporters and importers is to hedge their currency risks and sit tight.”

The Indian rupee recovered some losses during the second half of the day, likely due to RBI intervention. RBI seemed to be selling dollars as the rupee touched 85.90, said a trader at a private sector bank.

“Today, there was mild intervention by RBI and additionally, falling oil prices also helped contain losses in the rupee,” said Anindya Banerjee, head of currency research, Kotak Securities. Brent oil prices dropped to their lowest since April 2021 to $63.64 per barrel, down 3% since the previous day, according to Reuters.

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