Rupee Dives to Fresh All-Time Low, Crumbling to 91.74 Against Dollar
Rupee Dives to Fresh All-Time Low, Crumbling to 91.74 Against Dollar
Rupee slides to a new record low as foreign outflows and a strong dollar weigh on India’s markets, sparking concerns over volatility and investor sentiment.
The rupee crashed 77 paise to an all-time low of 91.74 against the U.S. dollar in intra-day trade, after opening at 91.05 and slipping further as the session progressed. The latest move underscored persistent foreign fund outflows and a robust greenback demand from metal importers, weighing on sentiment across Indian markets.
On the domestic equity front, key indices moved lower as risk-off sentiment took hold: the Sensex fell by 289.85 points to 81,890.62, while the Nifty declined 77.40 points to 25,155.10. The currency weakness came amid a backdrop of global uncertainty, with the dollar index trading modestly lower at 98.61, while Brent crude drifted 1.88% lower to $63.70 per barrel.
Traders cited heightened tensions in Europe over the Greenland issue and potential tariffs, compounded by a negative domestic trend, as factors denting investor appetite. Market participants noted that currency volatility is making foreign investments riskier, especially for those assessing risk-adjusted returns and hedging costs. A seasoned market strategist pointed out that long-term investors face compressed yields after hedging costs, while short-term capital is more prone to sudden outflows.
Analysts emphasized the need to mitigate currency volatility and preserve policy credibility to maintain investor confidence during periods of global uncertainty. While India’s long-term growth prospects remain robust, the near-term pain in the currency market could spill over into the equity and debt segments if volatility persists. Monitoring the exchange rate and intervention cues from policymakers will be crucial in the coming sessions.
