Adani regulatory buzz, offshore flows push rupee to new lows against dollar

Mumbai: The rupee nearly touched the 92/$1 mark Friday amid sustained selling in Indian equities, dollar demand due to hedging by importers, and positions maturing in the offshore non deliverable forwards (NDF) market, with reports of possible US regulatory summons to billionaire Gautam Adani blamed for the unit's largely back-loaded retreat.

The rupee weakened to a record low of 91.97/$1 during the day, and later closed slightly higher, but still at a record low of 91.94/$1, down 31 paise from its previous close of 91.63/$1. The Reserve Bank of India's (RBI) intervention was mild, traders said, and its impact wasn't enough to change the trajectory of the currency, traders said.

The currency weakened in the second half of the session after reports came in that the US market regulator has approached the judiciary and could issue summons to Adani in connection with alleged bribery and fraud.


"In the morning, there was dollar selling that kept the rupee near 91.40/$1 levels. Later, a private sector bank bought dollars, taking the rupee back to 91.65/$1 where it hovered for a long time before the Adani news came," said Anil Bhansali, head of treasury at Finrex Treasury Advisors.

The reported US indictment, which was unsealed in November 2024, accused Adani group executives of being part of a scheme to pay bribes to Indian officials for buying electricity produced by Adani Green Energy, Reuters said in a report. On Friday, the group's flagship company, Adani Enterprises was the top loser on India's benchmark Nifty 50. The firm's shares fell 10.65% to ₹1,864.2, while the Nifty declined 0.95% at close.

Foreign portfolio investors have sold over $3 billion from Indian stocks and bonds in January so far, according to NSDL data.

Traders expect weakness to continue, and don't rule out the possibility of the rupee touching 93/$1 mark by the end of this fiscal year.