Rupee falls 2 paise to all-time low of 84.87 against U.S. dollar in early trade

Rupee hits all-time low against dollar as markets anticipate rate cut; new RBI Governor expected to be dovish.

The rupee fell 2 paise to all-time low of 84.87 against the U.S. dollar in early trade on Wednesday (December 11, 2024), amid rising expectations of a shift in the Reserve Bank’s monetary policy stance post the appointment of Sanjay Malhotra as the new RBI Governor.

Forex traders said markets now expect a rate cut in the upcoming monetary policy in February. While a muted tone in the domestic market and the overall strength of the U.S. dollar index further pressurised the rupee.

At the interbank foreign exchange, the rupee opened at 84.87, its all-time low against the greenback, registering a fall of 2 paise over its previous close.

On Tuesday (December 10, 2024), the rupee settled for the day on a flat note higher by just 1 paisa at 84.85 against the U.S. dollar.

The Indian rupee opened at its lowest after the market expected the new RBI Governor to be dovish in his stance coming from the Finance Ministry and may cut rates as early as in February 2025, said Anil Kumar Bhansali, head of Treasury and executive director, Finrex Treasury Advisors LLP.

The government on Monday (Dec. 9) appointed Revenue Secretary Sanjay Malhotra as the 26th Governor of the Reserve Bank of India.

Mr. Malhotra takes guard at a time when the Indian economy is faced with the dual challenge of slowing growth rate and high inflation.