Rupee falls to record low against dollar amid import pressures and capital outflows
MUMBAI, India — The Indian rupee weakened to a record low on Wednesday, pressured by a stronger U.S. dollar, rising import costs, and continued foreign fund outflows.
The currency slipped to 92.63 against the dollar during intraday trading, after opening at 92.42 in the interbank foreign exchange market. It had closed at 92.37 in the previous session.
Market participants said a breach of key levels triggered further selling in the currency.
“The Indian rupee slipped to a fresh record low as a break below the 92.50 level triggered selling pressure, exacerbated by thin dollar liquidity ahead of a bank holiday,” said Dilip Parmar, senior research analyst at HDFC Securities.
Despite relatively supportive global conditions, including softer crude prices and steady risk appetite, the rupee remained under pressure due to strong demand for dollars from importers.
“With geopolitical tensions stoking fears of a wider trade deficit, year-end demand remains robust. We see USD/INR facing resistance at 92.85, with support at 92.40,” Parmar said.
The currency has weakened by more than 1 percent amid ongoing tensions in West Asia, which have added to concerns over trade balances and external vulnerabilities.
Analysts said rising import costs, particularly for energy, continue to weigh on the rupee.
“The rupee traded sharply weaker at around 92.60, marking fresh all-time lows, as persistent pressure from a rising import bill continues to weigh on the currency,” said Jateen Trivedi, vice president for research (commodity and currency) at LKP Securities.
“Elevated crude oil prices, coupled with shipment disruptions through the Strait of Hormuz, are increasing concerns over sustained higher import costs for India,” he said.
Trivedi added that the broader macroeconomic backdrop remains challenging, with oil prices expected to stay elevated in the near term.
“In the near term, the rupee is expected to trade in the range of 92.25–92.95 against the US dollar,” he said.
The dollar index, which measures the greenback against a basket of major currencies, was slightly higher at 99.62.
Brent crude, the global oil benchmark, was trading near $103 per barrel in futures markets.
In domestic equities, benchmark indices were higher, with the Sensex rising 719.77 points to 76,790.61 and the Nifty gaining 215.75 points to 23,796.90.
Foreign institutional investors remained net sellers, offloading equities worth Rs 4,741.22 crore in the previous session, according to exchange data.
In commodities, precious metals declined, with gold down 0.54 percent to Rs 1,55,142 and silver falling 1.42 percent to Rs 2,49,501. (Source: IANS)
