The local currency slipped sharply during the trading session, falling 36 paise from the previous close to touch an intraday record low of 91.14 against the US dollar before recovering some ground later in the day.
Intraday volatility and recovery
Markets saw a quick move lower as the currency hit its weakest level ever versus the greenback. The fall of 36 paise was notable for its speed, but traders pushed prices back up somewhat by the close, trimming losses from the session low.
What this swing means
- Importers: A weaker currency makes imported goods and services more expensive, raising costs for companies that rely on foreign inputs.
- Exporters: Some exporters may benefit from a softer local unit because their foreign earnings convert into higher local-currency revenue.
- Inflation risks: If the weakness persists, it can feed into higher consumer prices through costlier imports.
Factors to watch
Currency moves like this are usually driven by a mix of global and domestic factors. Keep an eye on:
- Direction of the US dollar and global risk sentiment
- Foreign capital flows and debt market moves
- Commodity prices, particularly oil
- Monetary policy signals from major central banks and the domestic regulator
Near-term outlook
Given the quick rebound during the session, the market remains sensitive to headline news and foreign-exchange flows. Traders and businesses will be watching macro data and policy cues closely to gauge whether the currency settles at these weaker levels or recovers further.