USD vs INR:  Selling in the equity market by foreign portfolio investors has increased pressure on the rupee. Due to this, the rupee weakened against the dollar and crossed the level of 84 today, and reached a new low. Dealers said that the rise in crude oil prices due to geopolitical tensions is also putting pressure on the rupee. On October 19, 2022, the rupee reached the level of 83 against the dollar and after about two years it crossed the level of Rs 84 per dollar.

At the end of trading, the rupee today closed at 84.07 per dollar. Earlier it had come down to 84.10. On Thursday it closed at 83.98. The previous lowest level of the rupee was 83.99 per dollar on September 12.

Dealers said the rupee did not fall further due to dollar selling by state-run banks on behalf of the central bank. The rupee has weakened 0.8 percent against the dollar in the current financial year and has been the worst performer among Asian currencies after the Bangladeshi taka and the Philippines peso. Foreign investors have sold $ 5.7 billion in the equity market so far this month and have also withdrawn $ 125 million from the debt segment.

Market participants said public sector banks sold dollars in the market on behalf of the Reserve Bank of India (RBI) to arrest the sharp fall in the rupee. Karur Vysya Bank treasury head VRC Reddy said, "This level should be maintained as it is very important psychologically. The Reserve Bank is allowing the rupee to depreciate gradually." He said, "This month the rupee may remain in the range of 83.90 to 84.10 per dollar." The Reserve Bank of India has been protecting the rupee from crossing the level of 84 per dollar for more than two months.

Amit Pabari, Managing Director at CR Forex, said, "The expected intervention of RBI and record currency reserves and strong resistance have supported the rupee at 84.10 per dollar. The rupee may again fall below the level of 84 after the selling by foreign investors stops." The country's foreign exchange reserves had crossed $ 700 billion in the week ended September 27.

According to the latest data from RBI, on October 4, the foreign exchange reserves were at a record level of $701 billion. This year India's currency reserves increased by about $78 billion. India is the second largest country after China in terms of foreign exchange reserves. RBI uses foreign exchange reserves to prevent unexpected fluctuations in the currency market.

Two weeks ago, the rupee strengthened to 83.48 per dollar after the US Federal Reserve cut the rate by 50 basis points. But the rupee again came under pressure due to rising oil prices amid geopolitical tensions in West Asia.

In the current financial year, the rupee has been continuously weakening. However, due to the intervention of RBI, it has remained within a range. So far this year, the rupee has weakened by 1.03 percent against the dollar. In October, it has fallen by 0.32 percent.