Indian Rupee Tumbles to All-Time Low Against US Dollar
The Indian rupee experienced a sharp decline in trading on Friday, hitting a historic low of 92 against the US dollar during intraday sessions. This marked a significant depreciation for the currency, reflecting ongoing pressures in the domestic financial landscape. According to forex traders, the rupee initially showed some gains but quickly reversed course as market sentiment turned bearish.
Factors Behind the Rupee's Record Decline
Forex market analysts attributed the rupee's plunge to a combination of weak domestic market performance and persistent outflows of foreign funds. The Indian stock markets have been under strain, with key indices showing volatility, which in turn impacted currency valuations. Additionally, foreign institutional investors have been pulling out capital from Indian assets, exacerbating the downward pressure on the rupee.
Key drivers included:
- Weak domestic equity markets leading to reduced investor confidence.
- Sustained foreign fund outflows as global investors seek safer havens.
- Broader economic uncertainties affecting currency stability.
Marginal Recovery and Settlement Levels
Despite the record low, the rupee managed a slight recovery towards the end of the trading day. It settled at 91.88 per US dollar, showing a marginal improvement from the intraday low. This recovery was limited, however, as underlying market conditions remained challenging. Traders noted that the rupee's movement was closely watched, with interventions potentially playing a role in stabilizing the currency.
The settlement at 91.88 indicates that while the rupee avoided closing at the absolute low, it still ended the day at a weakened position compared to previous sessions. Market participants are monitoring for further developments that could influence the rupee's trajectory in the coming days.
