NEW DELHI — The Indian rupee plunged to a historic low on Wednesday, slipping past the 90-per-dollar threshold for the first time and deepening concerns among investors already uneasy about foreign outflows and stalled trade negotiations with the United States.
The currency weakened to 90.13 against the U.S. dollar, breaking Tuesday’s all-time low of 89.9475. Analysts attributed the sharp slide to weak trade and portfolio flows, combined with uncertainty surrounding the long-anticipated India–U.S. trade deal.
The rupee’s fall weighed heavily on domestic markets. The Nifty 50 dipped below the psychologically important 26,000 level, while the Sensex fell nearly 200 points in early trading as investors grew increasingly wary of the inflationary impact of a weaker currency and the likelihood of continued foreign institutional investor (FII) selling.
Market participants said sentiment remained tense throughout the session, with traders closely monitoring both the rupee’s trajectory and signs of progress in trade talks with Washington. “The rupee depreciation will halt and even reverse when the India-U.S. trade deal materialises. This is likely this month. A lot, however, will depend on the details of the tariffs to be imposed on India as part of the deal,” analysts said.
Equities opened on a subdued note as well. The Sensex edged up only 12 points to 85,151 at the opening bell, while the Nifty slipped 18 points to 26,014. Shares of Hindustan Unilever, Titan, Tata Motors PV, NTPC, BEL, Trent, Bajaj Finserv, Kotak Bank, Ultratech Cement, Maruti Suzuki, L&T, Power Grid, and ITC were among the morning’s top losers.
Analysts warned that the rupee’s continued slide — coupled with what they described as the Reserve Bank of India’s reluctance to intervene — has intensified pressure on the markets. “A real concern now, which has contributed to the slow drifting down of the market, is the continued depreciation in the rupee and fears of further depreciation since the RBI is not intervening to support the rupee,” they said.
“This concern is forcing the FIIs to sell despite the improving fundamentals of rising corporate earnings and strong rebound in GDP growth,” they added.
With currency volatility rising and foreign outflows persisting, traders are bracing for more turbulence unless clear signals emerge from the India–U.S. trade discussions. (Source: IANS)
