PTI mumbai

The rupee plunged 98 paise to close at its lifetime low of 89.66 against the US dollar on Friday, due to a huge demand for the greenback in the domestic forex market amid widespread selling pressure in local and global equities and trade-related uncertainties. Concerns over a possible bubble building around artificial-intelligence technology stocks also spooked investor sentiments, forex traders said.

Besides, renewed foreign fund outflows added to the gloom, they added. At the interbank foreign exchange market, the rupee opened almost flat at 88.67 and before turning extremely volatile in the afternoon session. In the steepest fall in over three years, the domestic currency nosedived 98 paise to finally settle at 89.66 against the American currency. The previous biggest one-day fall was recorded at 99 paise against the dollar on February 24, 2022.

"The Indian rupee witnessed a dramatic move on Friday, breaking its all-time high...in a sudden spike that caught the market completely off guard. Unlike earlier sessions, where news flow guided the price action, this move was largely demand-driven, triggered by an unexpected wave of dollar buying at a time when supply stayed quiet," CR Forex Advisors said in a note.

"What made the move even more striking was that all other major indicators remained broadly stable -- the dollar index, crude oil prices, EM currencies, and even gold hardly moved. This calm backdrop further reinforced that Friday's jump in USD/INR was not driven by global cues, but purely by domestic dollar demand overwhelming available supply."