MUMBAI: The rupee ended the day at a new closing low of 83.21 against the dollar in the interbank foreign exchange market on Thursday as Asian currencies continued to weaken against the dollar. The onshore
sank to 7.33 per dollar, its weakest since December 2007.
The rupee opened around Wednesday’s close of 82.14 and traded weak despite dollar sales by
. The dollar has been gaining ground against other currencies as yields on US bonds have risen on the expectation that the Federal Reserve could hike rates again. Higher bond yields make US dollar assets more attractive to international funds vis-a-vis emerging markets.
“It is a delicate balance that RBI must strike between managing the all-time high on dollar-rupee and managing the floor on Chinese yuan/rupee pairs. One of them may eventually have to give way. Exporters are advised to tread cautiously until the Yuan and crude relent. Importers are advised to consider increasing their hedge ratios,” said
in its forex report. The spot market is also influenced by the trading positions taken by banks in non-deliverable forward markets.