The Indian rupee plunged to a record low, closing at 85.9650 against the US dollar, edging closer to the 86 mark. This marks the rupee’s tenth consecutive weekly loss, with a 0.2% decline this week alone.
The persistent fall is attributed to a strong US dollar, driven by aggressive interest rate hikes by the US Federal Reserve and ongoing global economic uncertainties. Additionally, sustained capital outflows from Indian markets and rising crude oil prices have added pressure on the domestic currency.
Currency analysts point to foreign investors pulling funds from Indian equities and bonds, further weakening the rupee. Geopolitical tensions and global inflationary trends have also contributed to the currency’s decline.
Experts warn that if the pressure continues, the rupee could breach the 86 mark in the coming days. The Reserve Bank of India (RBI) is reportedly monitoring the situation closely and may intervene to curb excessive volatility.
Importers are expected to face rising costs, particularly for crude oil and essential commodities, which could widen India’s trade deficit. Meanwhile, exporters may benefit from the weaker rupee, improving their global competitiveness.
Market participants are now awaiting the RBI’s next move to stabilize the currency amid growing economic challenges.
